Executive Summary
On 5 November 2025, the Corporate and Accounting Laws (Amendment) Bill (“Bill“) was passed in the Parliament, but has yet to come into force. Most of the provisions of the Bill are expected to be in force from April 2026 onwards. The Bill will amend the Accountants Act 2004, the Companies Act 1967 (“CA“), the Insolvency, Restructuring and Dissolution Act 2018, the Limited Liability Partnerships Act 2005 (“LLP Act“), the Limited Partnerships Act 2008 and the Variable Capital Companies Act 2018 (“VCC Act“) to implement changes with, among other things, the following key objectives:
- Safeguarding shareholders’ interests;
- Easing the regulatory burden for Singapore business vehicles;
- Preventing the misuse of Singapore business vehicles for unlawful purposes; and
- Strengthening companies’ regulatory framework.
This follows a public consultation on the Bill conducted by the Ministry of Finance (“MOF“) and the Accounting and Corporate Regulatory Authority (“ACRA“) from 14 to 31 July 2025 (“July 2025 Consultation Paper“). Click here for the response by MOF and ACRA on the feedback received during the consultation, which were generally supportive. For a summary of the public consultation, refer to our July 2025 Legal Update on “ACRA Consults on Legislative Changes to Safeguard Shareholders’ Interests and Ease Regulatory Burden“. By way of background, some of the changes in the Bill stem from the Companies Act Working Group’s (“CAWG“) recommendations in the “Report of the Companies Act Working Group” released on 15 May 2019. CAWG was set up in January 2018 to review several areas of the CA to ensure that Singapore’s corporate laws and regulatory framework stay competitive.
Safeguarding Shareholders’ Interests
| Current Requirements | Changes in the Bill |
|---|---|
| Specifying Shareholders' Approval Threshold for Variation of Class Rights | |
| Section 74 of the CA protects the rights of holders of classes of shares of a company with share capital that is divided into different classes. Section 74 of the CA provides that, where the company's constitution allows the variation or abrogation of rights attached to any class of its shares and the class rights have been varied or abrogated accordingly, the holders of at least 5% of the total number of issued shares of that class of shares may apply to the General Division of the High Court ("Court") to cancel the variation or abrogation. However, section 74 of the CA does not specify the threshold for shareholders' approval to vary or abrogate class rights. This is left to the company to specify in its constitution. For example, the model constitution for a private company limited by shares prescribed under section 36 of the CA provides that the rights attached to any class of shares may be varied with: (i) the consent in writing of the holders of 75% of the issued shares of that class; and (ii) the sanction of a special resolution passed at a separate general meeting of the holders of the shares of the class. | For greater clarity, section 74 of the CA will be amended to provide that where a company's constitution allows the variation or abrogation of rights attached to any class of its shares, any resolution to vary or abrogate any class rights must be approved: • in accordance with the requirements specified in the constitution; or • by at least 75% of the total number of issued shares of that class of shares, if the constitution is silent in this regard. The 5% threshold that applies to the right to apply to court to cancel a variation or abrogation of class rights pursuant to section 74(1) of the CA is retained. |
| Two-tiered Approval for Selective Share Buy-back of Part of Shares in a Class | |
| Section 76D of the CA allows a company to buy back its own shares if the purchase or acquisition is made in accordance with an agreement authorised in advance by a special resolution of the company. This is referred to in the CA as a selective off-market purchase. The shareholders whose shares are being bought and their associates are not allowed to vote on the special resolution. The current approval process may lead to unfairness where the company only proposes to buy back some (but not all) of the shares in a particular class ("Affected Class"). The company could have chosen to buy back all of the shares in the Affected Class, but decided not to, leaving some of the shareholders in the Affected Class without the same opportunity to sell. The approval process would be fairer for the non-selling shareholders in the Affected Class if they are afforded greater influence over the decision regarding whether their shares should be included in the share buy-back. | To better safeguard the rights of the shareholders within a class of shares that is the subject of a selective off-market purchase, where not all shares of that class are purchased, section 76D will be revised to require two tiers of approval: • Tier 1: The company must first obtain the consent of at least 75% of the shareholders of that class (but excluding any person whose shares are proposed to be purchased or acquired and the person's associated persons) to the terms of the selective off-market purchase agreement. • Tier 2: The terms of the selective off-market purchase must then be approved by a special resolution of the company, with no votes cast by any person whose shares are proposed to be purchased or acquired or by the person's associated persons. |
| Fine-tuning Computation of Compulsory Acquisition Threshold | |
| Section 215 of the CA provides that a person ("offeror") is entitled to compulsorily acquire the shares of any dissenting shareholder where a scheme or contract involving the transfer of all shares, or all shares in a specific class, in a company ("target company") has been approved by the prescribed threshold of shareholders of the target company. The prescribed threshold is the holders of at least 90% of the total number of shares of the target company (excluding treasury shares), or of the shares of that class (other than shares already held at the date of the offer by the offeror, and excluding any shares in the target company held as treasury shares) ("90% threshold"). Currently, in computing the 90% threshold, new shares issued after the date of the offer is disregarded. Thus, the shares of the holders of options or convertible securities issued on or before the date of the offer and who are potential shareholders of the target company are excluded. | In order to protect the rights of the holders of options or convertible securities issued on or before the date of the compulsory acquisition offer ("Existing Convertible Securities"), section 215 will be revised to provide that in determining the 90% threshold, shares that are issued after the date of the offer pursuant to the exercise of Existing Convertible Securities will be counted. Section 215 will also clarify that once the 90% threshold is reached, the offeror has the right to issue the notice of compulsory acquisition within two months of attaining the threshold, and such a right will not be invalidated if, due to newly issued shares arising from conversion of shares, the approval drops to below 90% after it had initially crossed 90%. This right to issue a notice applies to all dissenting shareholders, including shareholders whose shares were allotted after the right to issue a notice arose. |
Easing Regulatory Burden for Business Vehicles
The July 2025 Consultation Paper contains proposed changes to the compliance requirements for public companies and the registered office of a company or foreign company. These changes aim to make Singapore’s company incorporation requirements less restrictive so as to increase Singapore’s competitiveness as a hub for incorporation, while ensuring that companies remain accountable and compliant with statutory requirements. The respondents to the consultation paper are generally supportive of the proposed changes.
However, feedback on the proposal to allow a sole director to be appointed as the company secretary is mixed. This proposed revision aims to reduce the compliance burden for smaller companies. ACRA considered the concerns raised on governance with regard to this proposal and will review it further before implementing it.
| Current Requirements | Changes in the Bill |
|---|---|
| Removing Requirement for Statement in lieu of Prospectus | |
| The CA requires a statement in lieu of prospectus to be filed with the Registrar of Companies ("Registrar") in the following circumstances:
• Upon conversion from a private company to a public company; • Upon the Court or Registrar determining that a company has ceased to be a private company; • Prior to first allotment of shares or debentures by a public company having a share capital that does not issue a prospectus on or with reference to its formation; and • Prior to commencing any business or exercising any borrowing power by a public company having a share capital that has not issued a prospectus inviting the public to subscribe for its shares. | The requirement to lodge a statement in lieu of prospectus under the circumstances prescribed in the CA will be removed to reduce the regulatory burden and duplicative reporting for public companies.
The information required in a statement in lieu of prospectus is generally covered by the more extensive prospectus requirements under the Securities and Futures Act 2001 ("SFA"). CAWG was of the view that there were no other circumstances, other than those already covered by the prospectus requirements or exemptions under the SFA, which may warrant disclosures in the form of a statement in lieu of prospectus. |
| Removing Requirements for Public Limited Companies to Convene Statutory Meetings and Prepare Statutory Reports | |
| Section 174 of the CA requires a public limited company with a share capital to hold a statutory meeting within a period of not less than one month and not more than three months after the date on which it is entitled to commence business. In addition, the directors of the company are required to forward a statutory report to every member of the company at least seven days before the day on which the statutory meeting is to be held. The statutory report must be prepared according to the requirements prescribed in the CA.
Non-compliance of the requirements on statutory meeting and statutory report is an offence punishable with a fine. | To provide more flexibility and reduce the regulatory burden for public limited companies with a share capital, the requirements to convene a statutory meeting and to prepare a statutory report will be removed as there are other safeguards in the CA that protect the shareholders' rights in this regard. |
| Allowing Companies / Foreign Companies to Specify Duration for Access to Registered Office | |
| The CA requires:
• 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. At least one of the company's secretaries, or his/her agent or clerk, must be present at the registered office during this prescribed duration; • a foreign company to have a registered office in Singapore to which all communications and notices may be addressed. It must be open and accessible to the public for not less than five hours between 9am and 5pm each business day. Any company record which is required to be available for inspection must be made available for inspection during the hours in which the registered office of the company is accessible to the public. | The requirements for the registered office of a company or foreign company to be open and accessible to the public as prescribed in the CA and for at least one of the company's secretaries, his/her agent or clerk, to be present at the registered office during the prescribed duration will be removed.
Instead, companies and foreign companies will be allowed to set specific hours for when their records can be inspected, and require anyone with inspection rights to give the company or foreign company reasonable advance notice before reviewing any record, with specified exceptions where inspection powers are exercised by, for example, the Minister or the Registrar. A notice of the situation of the registered office of a proposed company and its opening days and hours must be lodged with the Registrar at the time of lodgment for its incorporation. |
Preventing Misuse of Singapore Business Vehicles
The CA, the LLP Act and the VCC Act will be revised, where relevant, to implement the following changes to strengthen safeguards against the misuse of Singapore business vehicles for unlawful purposes:
- Providing that the Registrar, the Registrar of Limited Liability Partnerships and the court must not restore the name of a company, foreign company or limited liability partnership (“LLP“) to the register where: (i) the 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 national security or interest for the name to be restored;
- Disqualifying a person convicted of money laundering offences from acting as a director or taking part in the management of a company, foreign company or variable capital company;
- Shortening the timeline of the striking off process for a company and LLP to reduce the likelihood of misusing inactive companies or LLPs for illicit purposes (e.g. money laundering).
Strengthening Companies’ Regulatory Framework
The regulatory framework for companies will be strengthened as follows:
- Increasing the maximum penalty that may be imposed for the offence under section 157(3) of the CA which requires, among other things, a director to act honestly and use reasonable diligence in the discharge of the duties of his/her office. The maximum fine for the offence will be increased from S$5,000 to S$20,000 with imprisonment for a maximum term of 12 months, or both.
- Requiring a director, who ceases to qualify to act as a director by virtue of certain provisions of the CA or a court order under certain provisions of the CA, to notify the company of this as soon as practicable but not later than 14 days after the disqualification. The director must also give notice to the Registrar if he/she has reasonable cause to believe that the company will not do so.
Our Comments
The proposed legislative changes will have a direct impact on both compliance practices and corporate transactions.
The introduction of higher approval thresholds for the variation of class rights and selective share buy-backs are designed to reduce the risk of abuse of power by majority shareholders and to strengthen protections for minority shareholders. However, these legislative changes may lengthen transaction timelines, so stakeholders should factor in additional lead times and communication strategies when the relevant provisions of the Bill come into force in 2026. Companies should review their constitutions and where appropriate, update them to reflect the new mechanics for class-rights variations. Early alignment will ensure a seamless transition once the Bill is in force.
At the same time, the Bill seeks to ease the administrative burden for companies by reducing duplicity in reporting (e.g. the removal of the requirements regarding the statement in lieu of prospectus and the statutory report for public limited companies), streamlining existing processes (e.g. by abolishing statutory meetings for public limited companies) and providing a company or foreign company the flexibility of specifying the duration of access to its registered office.
If you have any queries on the above matters, or wish to find out more about this development or other changes that are not covered in this Update, please reach out to our Team members set out on this page.
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