Knowledge Highlights 18 January 2023
ACRA consults on proposed legislative amendments relating to data, digitalisation, and corporate transparency
Knowledge Highlights 23 December 2021
The Accounting and Corporate Regulatory Authority (“ACRA”) is conducting a public consultation on proposed amendments to the Companies Act (“CA”), Accountants Act, Accounting and Corporate Regulatory Authority Act (“ACRA Act”), Business Names Registration Act, Limited Liability Partnerships Act (“LLP Act”), Limited Partnerships Act and Variable Capital Companies Act 2018 on matters relating to data accuracy and privacy, digitalisation of correspondence and corporate transparency. The consultation closes on 28 January 2022.
ACRA regularly reviews and seeks public feedback on legislation to foster a trusted and vibrant business environment in Singapore. Following its public consultation on proposed amendments to the CA in July 2020, ACRA is proposing additional amendments to the CA as well as other ACRA-administered legislation. The proposed amendments are to:
- empower ACRA to draw data from other agencies or entities to improve filing convenience and data accuracy;
- strike a balance between corporate transparency and personal data privacy;
- facilitate digital correspondences with businesses to improve efficiency and support sustainability efforts;
- enhance transparency of beneficial ownership of companies and limited liability partnerships (“LLPs”) to maintain Singapore’s reputation as a trusted financial hub; and
- streamline processes for service of summons and striking off to facilitate compliance.
Improving filing convenience and data accuracy
As the national business registry, one of ACRA’s functions is to collect documents and information on business entities and related individuals, and public accountants, and to provide the public access to such information to enhance corporate transparency and facilitate business activity. The proposed amendments empower ACRA to:
- obtain data from specified government agencies for the purpose of filing; and
- use data from specified entities to verify information on ACRA’s register.
This will reduce the amount of data customers must file with ACRA, improve convenience to filers, and improve the accuracy and value of the data to users. It will also facilitate Government-to-Business digital correspondences with business entities.
Balancing corporate transparency and personal data privacy
ACRA seeks to strike a balance between corporate transparency and personal data privacy and to address concerns that individuals may have over the disclosure of the personal data that they file with ACRA. ACRA has received feedback that it should limit the personal data that is made available publicly, and at the same time, there have been requests from government agencies and private institutions for ACRA to share more business data for research, enforcement, and verification purposes.
The proposed amendments seek to:
- provide flexibility for ACRA to specify personal data relating to individuals that may need to be collected and to introduce a tiered disclosure framework to calibrate the disclosure of personal data;
- standardise the references to the “name” of individuals in ACRA-administered legislation;
- partially mask the identification numbers of all individuals in ACRA’s registers which are made available to the public; and
- introduce a “contact address” as the default address of individuals that will be shown to the public, instead of the individual’s residential address.
Facilitating digital correspondence to improve efficiency and support sustainability efforts
As part of Singapore’s move towards a Smart Nation and a Sustainable Singapore, ACRA seeks to go digital in its correspondences with business entities. The proposed amendments seek to:
- require position holders and shareholders to provide email addresses and mobile numbers, and business entities to provide their business email addresses; and
- allow ACRA’s correspondences and notices to be delivered to and accessed by such individuals and businesses via a virtual mailbox.
Enhancing transparency of beneficial ownership of companies and LLPs
ACRA continues to improve the transparency of beneficial ownership of companies and LLPs, and reduce opportunities for the misuse of corporate entities for illicit purposes. The proposed amendments are to:
- remove the exemption of certain local companies from the requirement to maintain registers of nominee directors;
- require companies and LLPs to verify the accuracy of information in their register of controllers with their controllers annually;
- introduce a financial penalty of up to S$10,000 on any person who inadvertently, or without intent to mislead or defraud, makes any inaccurate or erroneous statement or information on beneficial ownership to the Registrar under the CA and LLP Act;
- increase the maximum fine for offences pertaining to the registers of controllers and nominee directors from S$5,000 to S$20,000; and
- extend the prescribed time for companies and LLPs to update their register of controllers from two business days to seven calendar days.
These measures are part of the ongoing efforts to maintain Singapore’s strong reputation as a trusted financial hub and are in line with international standards for combating money laundering, terrorism financing and other threats to the integrity of the international financial system.
Streamlining and clarifying processes
Other proposed amendments to the CA and other ACRA-administered legislation aim to clarify and update regulatory requirements, and they include, to:
- standardise and consolidate the service of summons and other civil originating process under the Acts administered by ACRA;
- streamline and clarify the striking off regime for companies, foreign companies, variable capital companies and LLPs; and
- make it clear that the Registrar may update the register of directors based on bankruptcy information provided by the Ministry of Law.
The following materials are available on the ACRA website www.acra.gov.sg:
- Press release: Public Consultation on Proposed Legislative Amendments Relating to Data, Digitalisation and Corporate Transparency for a Trusted and Vibrant Business Environment in Singapore
- Public Consultation on Proposed Legislative Amendments Relating to Data, Digitalisation and Corporate Transparency for a Trusted and Vibrant Business Environment in Singapore
- Annex A: ACRA’s proposals on personal data collection and use, filing convenience and digital correspondences
- Annex B: ACRA’s proposals to enhance transparency of beneficial ownership of companies and limited liability partnerships
- Annex C: ACRA’s proposed amendments to the Companies Act and other ACRA-administered legislation to clarify and update regulatory requirements
Knowledge Highlights 25 January 2023