Singapore may be a business friendly city, but starting a company still comes with its own set of troubles. There are complicated rules and regulations an entrepreneur has to navigate through to incorporate a company in Singapore. More importantly, how do you decide who should be the Company director, and Secretary?
We have come up with a list of roles and responsibilities that you will find helpful especially if you are a first time entrepreneur in Singapore.
According to the Companies Act in Singapore, there must be at least one resident director and one company secretary. Resident director simply means that the director has to reside in Singapore, but he/she can be Singapore citizen, Permanent Resident , Entrepass holder or an Employment Pass Holder.
Roles of Company Director
The director is the legal representative of the company but he/she may not have to take up leadership position of the company. As a director, he/she is obliged to act honestly and put the interest of the company first. The director also has to avoid conflict of interest. This means that he/she is not allow to carry out personal transactions with the company, take advantage of corporate information to set up rival companies or hold dual directorship in another competitor firm. The director is also obliged to exercise care, skill and diligence to make critical decision. He/she is also not allowed to misuse their power and information for personal use.
According to the Companies Act, Company director has to fulfill the following:
1. Annual General Meeting (AGM) and Annual Return (AR)
The director has to file annual returns which basically mean the financial statement of that year. He/she has to convene AGM to present financial statements ot the shareholders. Financial reports are expected to be sent to the members 14 days before the AGM date. The annual returns must also be filed to ACRA within 1 month after the AGM is held.
2. Keeping records of Statutory Registers
Statutory registers in simple words simply mean keeping record of the important things of the company structure. For instance, register of members, register of charges, register of director’s shareholdings etc. This activity can also be performed by the company secretary.
3. Register an office address.
Yes, it's the director’s responsibility to get a proper office address to kickstart work.
4. Report changes in company directors, secretary, auditors and managers.
The director has to inform ACRA if there is any changes to the above.
5. Reporting changes in the Register for Directors Shareholding
Director has to declare its form of share, rights, options or contracts recorded in the Register. If there is any changes, it is the job of the company secretary to change the register.
Shareholders may also appoint nominee director to represent them during board meeting. This usually happens when the shareholder does not live in the country where the company is incorporated in. A nominee director has to be a Singapore citizen, Singapore Permanent Resident or in possession of Singapore Employment Pass/EntrePass Holder with a residential address in Singapore.
Under Singapore law, it is mandatory for company to appoint at least one company secretary. Like director, company secretary has to be a natural person and a resident of Singapore.
Here are some key responsibilities of Company Secretary:
1. Maintenance of statutory registers
Ensure that the register of members, register of charges, register of director’s shareholdings is updated. This activity may be performed by the director too.
2. Custody of the company seal
The secretary has to keep the seal and use it on important documents.
3. Notice and agenda of meetings
The secretary has to prepare the agenda of the meeting, and to send out notices of the meetings to the members and shareholders to ensure shareholders are well prepared.
4. Follow the constitution of the company
In some ways, the company secretary acts like a police whereby he/she has to ensure that members and shareholders act according to the constitution of the company.
Public Company versus Private Company
For public company, company secretary has to be a trained and qualified as a lawyer, accountant or be a member of the Association of the Institute of Chartered Secretaries and Adminstrators. ( “SAICSA”) On the other hand, the requirements for company secretary for a private company is relatively more relaxed. Individual above 18 years old can generally take up the role.
With so many rules to remember, are you feeling confused and afraid? No worries. Since 2016, Aegis Consultancy has helped numerous start ups and budding companies to incorporate in Singapore while streamlining their incorporation process. This frees up time for you to concentrate on other more important matters such as sales and operations, while we handle the messy stuff for you. If you are facing any difficulties, feel free to email to us and we will get back to you shortly.