Knowledge Highlights 30 July 2025
MOF and ACRA consult on legislative amendments under draft Corporate and Accounting Laws (Amendment) Bill to prevent misuse of companies, reduce regulatory burden, and safeguard shareholders’ interests
ACRA consultation paper on draft Corporate and Accounting Laws (Amendment) Bill
On 14 July 2025, the Ministry of Finance (“MOF”) and the Accounting and Corporate Regulatory Authority (“ACRA”) published a consultation paper seeking feedback on a draft Corporate and Accounting Laws (Amendment) Bill (“draft Bill”) which seeks to amend the following statutes:
- Accountants Act 2004;
- Accounting and Corporate Regulatory Authority Act 2004 (“ACRA Act”);
- Companies Act 1967 (“Companies Act”);
- Limited Liability Partnerships Act 2005 (“LLP Act”); and
- Limited Partnerships Act 2008 (“LP Act”),
to prevent the misuse of companies for unlawful purposes, reduce the regulatory burden for companies, safeguard shareholders’ interests, and enhance the regulatory regime for public accountants. The consultation closes on 31 July 2025.
The draft Bill includes provisions arising from proposals set out in consultation papers published by ACRA on 20 July 2020 (“2020 Consultation”) and 17 December 2021 (“2021 Consultation”).
ACRA Response
On 11 July 2025, ACRA responded to feedback on proposals relating to directors and company secretaries, safeguarding shareholders’ interests, and clarifying and updating regulatory requirements (“ACRA Response”). The proposals that were accepted or modified following the feedback to ACRA were incorporated into the draft Bill.
Key amendments
This Alert highlights key proposed amendments to the ACRA Act, the Companies Act, the LLP Act, and the LP Act.
To prevent misuse of companies for unlawful purposes
Application for restoration of entity
The draft Bill provides that a court or the Registrar must refuse an application for restoration of an entity where (i) the restored entity is likely to be used for an unlawful purpose or for purposes prejudicial to public peace, welfare, or good order in Singapore; or (ii) it would be contrary to the national security or interest for the entity to be restored.
The amendment specifies the grounds for refusal, aligning them with the criteria for refusing the registration of a proposed company’s constitution under the Companies Act and the grounds for winding up a company under section 124(1)(g) read with section 125(1)(n) of the Insolvency, Restructuring and Dissolution Act 2018.
Disqualification from acting as director
The draft Bill provides that a person is disqualified from acting as a director if the person is convicted of an offence under section 50, 51, 53, 54, 55, or 55A of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992, where the conviction was on or after the date of commencement of the provision.
This new ground of disqualification strengthens Singapore’s anti-money laundering regime.
Gazette notices for striking off
The draft Bill (i) shortens the timeline of the striking-off process to reduce the likelihood of misusing inactive companies for illicit purposes; and (ii) improves the efficiency of the striking-off process as a whole without changing the length of statutory period (60 days) for the public to lodge objections
In the case of voluntary striking off, the draft Bill (i) allows the Registrar to publish the Gazette notice as early as the next day after the letter is sent (regardless of the mode of delivery); and (ii) requires 60 days (for public to object), instead of 90 days.
In the case of Registrar-initiated striking off, the draft Bill (i) allows the Registrar to publish the Gazette notice 15 days, a reduction from the 30 days originally proposed in the 2021 Consultation, after the letter is sent (regardless of the mode of delivery); and (ii) requires 75 days (15 days for the company to object, and 60 days for public to object), instead of 90 days.
Definition and obligations relating to AML/CFT
The draft Bill amends the definition and obligations relating to anti-money laundering and countering the financing of terrorism (AML/CFT) to explicitly include countering the financing of proliferation of weapons of mass destruction. The proposed amendment is in line with the Financial Action Task Force’s requirements for countries to explicitly assess and address risk related to proliferation financing.
To reduce regulatory burden for companies
Sole director as secretary
The draft Bill allows a sole director to be appointed as the company secretary. To safeguard statutory compliance, a sole director acting as company secretary must demonstrate the requisite knowledge and experience required of a company secretary to fulfil the role effectively.
ACRA notes that directors remain ultimately responsible and liable for company affairs. This amendment aligns with practices in jurisdictions like the United Kingdom, which have repealed similar prohibitions, and could help reduce compliance costs for smaller companies.
Statement in lieu of prospectus
The draft Bill removes the requirement to lodge a statement in lieu of prospectus under the circumstances prescribed in the Companies Act to reduce regulatory burden and duplicative reporting.
For public companies, the information required in a statement in lieu of prospectus is already covered by the prospectus requirements under the Securities and Futures Act 2001.
Statutory meetings and statutory reports for public limited companies
The draft Bill removes the requirements for public limited companies with a share capital to convene a statutory meeting and prepare a statutory report to provide more flexibility and reduce regulatory burden for public limited companies, without compromising members’ rights, since companies are required to hold annual general meetings (“AGMs”) annually and members will have access to information on (i) financial statements; (ii) registers of directors’ shareholdings and chief executive officer’s shareholdings; (iii) register of members, through the AGM, and there are also other available means to convene meetings under the Companies Act.
Registered office
The draft Bill (i) removes the requirement for a company’s registered office to be open and accessible to the public for not less than three hours during ordinary business hours on each business day, and other related requirements; and (ii) allows companies to provide for the hours during which the rights of inspection of a company’s records may be exercised and to provide that a person entitled to inspect any company record must give the company reasonable notice of the person’s intent to inspect, with specified exceptions where inspection powers are exercised by, for example, the Minister or the Registrar.
This will provide companies with flexibility to determine their registered offices’ opening hours without compromising those who have rights to inspect company records or serve documents to companies.
To safeguard shareholders’ interests
Selective off-market purchase
The draft Bill (i) requires two tiers of approval for selective off-market purchase or acquisition of own shares by (i) the members of the company less the target; and (ii) the relevant members within that class of shares less the target under section 76D of the Companies Act; and (ii) requires the percentage threshold for both tiers of approval to be 75%, which is the same as that for the special resolution currently required under section 76D of the Companies Act.
This will ensure that the voting rights of shareholders within a class who are not targeted are not diluted.
Variation or abrogation of class rights
The draft Bill requires a variation or abrogation of class rights to be approved by at least 75% of the class-rights holders unless the constitution of the company specifies otherwise, but retains the current 5% threshold that applies to the right to apply to court to cancel a variation or abrogation of class rights.
This will provide clarity on the quantum of shareholders’ approval required to vary or abrogate class rights. The quantum of 75% is aligned with existing practice.
The proposed carve-out (“unless the constitution of the company specifies otherwise”) provides flexibility for companies to decide the appropriate threshold at which certain class rights can be varied.
Compulsory acquisition
Currently, under the Companies Act, an offeror can serve a notice of compulsory acquisition on dissenting shareholders within two months after 90% of the shareholders approve the offer to acquire all the shares of the company. Computation of the 90% threshold excludes new shares issued after the date of the offer.
The draft Bill introduces amendments to include the shares of the holders of options or convertible securities issued on or before the date of the offer, who exercise their conversion rights prior to the date of the notice of compulsory acquisition, in computing whether the 90% threshold in section 215(1) of the Companies Act has been met.
This will increase protection for holders of options and convertible securities. Introducing a deadline of the date of notice of compulsory acquisition places the onus on these holders to exercise their conversion rights in a timely manner if they intend to have their disapproval count in calculating the 90% threshold. In addition, the holders of existing options or convertible securities are not prejudiced as potential shareholders because their conversion rights are respected vis-à-vis the 90% threshold.
Other amendments
Other amendments include:
(i) requiring all directors disqualified under the Companies Act to notify their companies of their disqualification; and allow all disqualified directors to notify the Registrar if they have reasonable cause to believe that their companies would not do so;
(ii) granting:
(a) the Registrar the power to exempt a company from compliance with any or all of the requirements of the Accounting Standards on a case-by-case basis taking into consideration the applicability of other accounting standards;
(b) the Minister the power to exempt by order published in the Gazette a specified class or description of companies from compliance of the financial statements or consolidated financial statements with any or all of the requirements of the Accounting Standards and require the companies of the specified class or description to comply with other accounting standards;
(iii) removing the requirement in section 27(9)(a) and (b) of the Companies Act for a full-stop at the end of the abbreviations “Pte” and “Ltd” contained in the name of a company; and
(iv) providing that all compositions sums collected by the Registrar under the LLP Act and the LP Act shall be paid into the Consolidated Fund.
To enhance regulatory regime for public accountants
The draft Bill also seeks to enhance the regulatory regime for public accountants. More details can be found in items 12 to 23 of Annex B.
Proposals under review
In the 2021 Consultation, ACRA proposed introducing a new provision in the ACRA Act to standardise and consolidate the provisions in the various ACRA-administered legislation relating to the service of summonses and other originating civil process.
In the ACRA Response, ACRA said that it will be reviewing the proposal further, having received further feedback on aligning the proposal with other legislation.
Feedback on other proposals
ACRA will publish a summary of feedback received on the rest of the proposals in the 2020 Consultation and 2021 Consultation, together with ACRA’s responses, in due course.
For more information on the proposals in the earlier consultations, please refer to our article “ACRA seeks feedback on wide-ranging proposed amendments to Companies Act” on the 2020 Consultation and our article “ACRA consults on proposed legislative amendments relating to data, digitalisation, and corporate transparency” on the 2021 Consultation.
Reference materials
The following materials are available on the MOF website www.mof.gov.sg and the ACRA website www.acra.gov.sg:
