New Requirements under Corporate Registers (Miscellaneous Amendments) Act
The Accounting and Corporate Regulatory Authority (“ACRA”) has implemented new compliance requirements relating to nominee shareholders and registrable controllers of companies incorporated or registered in Singapore and LLPs. These new requirements took effect from 4 October 2022.
New Register of Nominee Shareholders to be maintained by the Company
Under the new Section 386ALA of the Companies Act 1967, Singapore companies and foreign companies registered in Singapore are now required to set up and maintain a Register of Nominee Shareholders (RONS) by 5 December 2022 unless they are exempted from doing so.
The following types of companies are exempted from these requirements:
- Local companies that are:
- Public Listed Company in Singapore
- Company that is a Singapore Financial Institution
- Company that is wholly owned by the Government of Singapore
- Company that is wholly owned by a statutory body established by or under a Public Act for public purpose
- Company that is a wholly owned subsidiary of a company mentioned above
- Company which shares are listed on a securities exchange in a country or territory outside Singapore which meets certain conditions
- Foreign companies that are:
- A foreign company that is a Singapore Financial Institution
- Foreign company that is a wholly owned subsidiary of a foreign company that is Singapore Financial Institution
- Foreign Company which shares are listed on securities exchange in a country or territory outside Singapore which meets certain conditions
This new Register is required to contain certain prescribed particulars of the nominator(s) of the companies’ nominee shareholder(s) and should be kept at the company’s registered office or at the registered office of their appointed Registered Filing Agent (“RFA”). Companies are also required to enter the information received from their nominee shareholders (including any updates) into the Register within 7 days after receiving the information.
Obligations of Nominee Shareholders
In addition, nominee shareholders should, within the applicable timelines:
- Inform their respective companies (including foreign companies registered in Singapore) of that fact, and
- Provide the particulars of their nominator to the Company.
Nominee shareholders must also inform their companies (including foreign companies) when they cease to be a nominee shareholder and of any change to the nominator’s particulars.
Who are considered Nominee Shareholders
A shareholder is a nominee if the shareholder: –
- Is accustomed or under an obligation (whether formal or informal) to vote, in respect of shares in the company or foreign company of which the shareholder is the registered holder, in accordance with the directions, instructions or wishes of any other person; and
- Receives dividends, in respect of shares in the company or foreign company which is the shareholder is the registered holder of any other person.
Based on our interpretation of the definition, corporate shareholders should not be considered as nominee shareholders.
What is to be done and by when
A shareholder of a Company or foreign company incorporated before 4 October 2022:
- Who is nominee shareholder must inform the company and provide the particulars of the nominator within 60 days after 4 October 2022; and
- Who becomes a nominee must inform the company and provide the particulars of the nominator within 30 days after the shareholder becomes a nominee.
A shareholder of a Company or foreign company incorporated on or after 4 October 2022:
- Who is nominee must inform the Company or foreign Company and provide the particulars of nominator within 30 days after the date of incorporation.
- Who become a nominees must inform the company or foreign Company and provide particulars of nominator within 30 days after the shareholder becomes a nominee.
- Cessation of Nominee within 30 days after cessation date.
- Any change to the particulars provided to the company or foreign company within 30 days after the change.
It is recommended that companies inform its shareholders immediately of these new requirements . If any of their shareholders are considered as nominee shareholders, the required details should be entered into the new Register promptly.
Other notes on the new Register
The Register of nominee shareholders must be made available to the Registrar (ACRA) and public agencies but should not be made available to the public.
If the new requirements are not complied with, the company and every officer of the company who is in default shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $5,000.
Updated requirements for identification of Registrable Controllers
In certain circumstances, Companies and Limited Liability Partnerships (LLPs) may not be able to identify a registrable controller who has significant interest in or significant control – For example, there are no persons having interest in more than 25% of the shares or voting rights in the Company or have significant control over the company.
Under the new legislation, these entities are now required to identify individuals with executive control as their registrable controller(s) as follows:
- For companies, directors with executive control and the Chief Executive Officer must be identified as its registrable controller(s).
- For LLPs, partner(s) with executive control must be identified as its registrable controller (s).
For companies and foreign companies, the following definitions are used for the purposes of this new requirement:
- “Chief Executive Officer” means any one or more persons, by whatever name described, who —
- is in direct employment of, or acting for or by arrangement with, the company; and
- is principally responsible for the management and conduct of the business of the company, or part of the business of the company, as the case may be;
- “Director with executive control” refers to a director of the company or foreign company who exercises executive control over the daily or regular affairs of the company or foreign company through a senior management position.
Companies and LLPs which were previously unable to identify a registrable controller are now required to record the particulars of individual with executive control in their existing Register of Registrable Controllers (“RORC”) by 5 December 2022. The same information must be lodged with ACRA central register within 2 business days after any update to their own RORC.
For companies that do not have Registrable Controllers, information of their directors with executive control and their Chief Executive Officer(s), if any, should be updated into the Company’s RORC and the information to submitted to ACRA.
Subsequent changes to the Company’s Registrable Controllers should be updated into the RORC within 2 business days and submitted to ACRA.
Wee Kong Eng
MTax, CA (Singapore), CIA, Dip. in Law, ATP (Income tax & GST), Assoc CVA
K E Wee & Associates PAC, Public Accountants and Chartered Accountants
Disclaimer and limitations
Information is updated as at 19 October 2022 and may be subject to change. The above Information may have been summarized, simplified or paraphrased for easier understanding and to suit scenarios more commonly applicable to client companies. It is not meant to be a comprehensive guide or substitute for professional advice. All opinions or interpretations are solely those of ourselves and our partner firms and may be subject to agreement by the relevant authorities. While effort has been made to ensure the accuracy of the above information, we shall not be liable for loss arising directly or indirectly from any inaccuracy or omission in the information provided.