Corporate and Accounting Laws (Amendment) Bill passed to prevent misuse of companies, safeguard shareholders’ interests, strengthen regulatory framework, and reduce regulatory burden

20 November 2025

On 5 November 2025, the Corporate and Accounting Laws (Amendment) Bill (“Bill”) was passed in Parliament. The Bill seeks to tighten rules against the misuse of companies for unlawful purposes, safeguard shareholders’ interests, strengthen the regulatory framework for companies, reduce regulatory burden for companies, and enhance the regulatory regime for public accountants. The key amendments in the Bill relate to the Companies Act 1967 (“Companies Act”), the Limited Liability Partnerships Act 2005 (“LLP Act”), and the Accountants Act 2004. The changes in the Bill will come into operation on a date to be appointed by notification in the Gazette.

The amendments proposed in the Bill arose from the Accounting and Corporate Regulatory Authority’s (“ACRA”) regular review of its regulatory functions to foster a trusted and vibrant business environment.

In her opening speech at the second reading of the Bill, Second Minister for Finance Indranee Rajah provided an overview of the key amendments introduced by the Bill. This article outlines key amendments to the Companies Act and the LLP Act.

Tightening rules against misuse of companies for unlawful purposes

The first set of amendments strengthens safeguards against the misuse of companies for unlawful purposes.

Under the Companies Act, the Registrar of Companies (“Registrar”) may refuse registration of a company if (i) it is likely to be used for an unlawful purpose or for purposes prejudicial to public peace, welfare, or good order in Singapore; or (ii) its registration would be contrary to the national security or interest (collectively, “grounds for refusal”).

However, the law currently does not explicitly require the courts or the Registrar to deny applications for restoration of struck-off companies, foreign companies, or limited liability partnerships based on the grounds for refusal. While struck-off entities with the aforementioned risks are typically not restored, clauses 84, 86, 93, 117, and 119 of the Bill now expressly specify grounds for such refusal in the Companies Act and the LLP Act for avoidance of doubt. This aligns with the existing criteria for refusing company registrations under the Companies Act, and for winding up a company under the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA”).

Safeguarding shareholders’ interests

The second set of key amendments safeguards shareholders’ interests.

Currently, a company may purchase its own shares through a selective off-market purchase, conducted outside of a securities exchange or not under an equal access scheme. This requires approval by a special resolution, with at least 75% of voting rights in favour, excluding the votes of the shareholders whose shares are being acquired.

However, in situations where a company has different classes of shares, this process may not sufficiently account for the interests of shareholders in the affected class who are not part of the selective off-market purchase.

To better safeguard shareholders’ interests, clause 50 of the Bill introduces a two-tier approval process for selective off-market purchases:

Tier 1, which is an existing provision in section 76D of the Companies Act, requires the approval by all shareholders, regardless of class of shares, excluding the shareholders whose shares are being acquired.
Tier 2, which is newly introduced under the Bill, requires the consent by the relevant shareholders within the affected class of shares, but excluding the shareholders whose shares are being acquired. This allows for shareholders within the affected class of shares to have a larger say in approving the selective off-market purchase.

Both tiers require a 75% approval threshold.

To simplify implementation for the new “Tier 2” approval, companies can obtain written consent from affected shareholders, and do not need to convene a separate class meeting.

Strengthening the regulatory framework for companies

The third set of amendments strengthens the regulatory framework for companies.

Section 157 of the Companies Act requires a director to manage the company and act in its best interests, honestly, and with reasonable diligence. A breach of the provision is an offence, and currently the penalty is a fine not exceeding S$5,000 or imprisonment for up to 12 months. However, when compared to penalties for equivalent offences in other leading common law jurisdictions, it was found that there was scope for an upward revision of the penalties.

Clause 58 of the Bill increases the maximum fine to S$20,000, or imprisonment for a term not exceeding 12 months, or both. This provides stronger penalties to deter potential offenders.

Reducing regulatory burden for companies

The fourth set of key amendments reduces the regulatory burden on companies.

Since inception of the Companies Act in 1967, a company’s registered office must be open to the public for at least three hours each business day. This was primarily intended to facilitate access to company records by any persons entitled to inspect them.

To reduce the regulatory burden on companies while maintaining the rights of those who need access to company records in the company’s registered office, clauses 52, 89, 90, and 99 of the Bill abolish the minimum opening hours requirement. Instead, the Bill provides that persons entitled to inspect any company record must give the company reasonable notice of their intent to do so. Upon being given such notice, companies must then make such records available for inspection for at least two hours during each of the relevant business days. This will give companies more flexibility to determine the operating hours of their registered offices.

For avoidance of doubt, the proposed amendment will not affect service of documents at the company’s registered office. The Companies Act allows a document to be served on a company by leaving it at or sending it by registered post to the registered office of the company, without requiring the registered office to be physically open.

Other provisions and consequential amendments

The other provisions in the Bill make technical, related, and consequential amendments, including to the Accounting and Corporate Regulatory Authority Act 2004, the Limited Partnerships Act 2008, the Variable Capital Companies Act 2018, the Exchanges (Demutualisation and Merger) Act 1999, the IRDA, and the Securities and Futures Act 2001.

Background

On 14 July 2025, the Ministry of Finance (“MOF”) and ACRA published a consultation paper seeking feedback on a draft version of the Bill (“Consultation Paper”). More information on the Consultation Paper is provided in our article “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”.