New Bills

Companies (Amendment) Bill 2002 (B16/2002)
The Companies (Amendment) Bill 2002 seeks to amend the Companies Act
(Cap 50) for the following purposes:

1. to make the filing of documents with the Registrar of Companies and the issue of documents by him medium neutral, so as to facilitate the filing and issue of such documents using the electronic filing system known as Bizfile. In many instances, the Companies Act is amended by a substitution of terms including the following:

• 'notice' substituted for 'certificate', eg a notice of incorporation will be substituted for a certificate of incorporation;
• 'approval' substituted for 'licence';
• 'declaration' substituted for 'statutory declaration';
• 'declaration of consent' substituted for 'written consent';
• 'copy of court order' substituted for 'office copy of court order'; and
• 'notice in prescribed form' substituted for 'written notice';

2. to give effect to the recommendations of the Disclosure and Accounting Standards Committee which was set up by the government to review the regulation of accounting standards in Singapore; and
3. to make other amendments to the Companies Act.

The following are highlights of the key changes proposed.

Implementation of Electronic Filing System

Section 12A will be amended for the following purposes:

• to enable the Minister for Finance to make regulations to require or permit the filing or issue of specified documents with or by the Registrar through the electronic filing service provided by the Registry of Companies; and
• to provide for the admissibility of an extract of information from any document filed with the Registrar, that is certified by the Registrar to be a true extract from that document, and to provide that such extract is presumed to be a true extract from that document; and for this to have effect notwithstanding any other written law (eg s 35 of the Evidence Act (Cap 97).

Definitions
Section 4(1) will be amended by inserting definitions of 'Accounting Standards' (as used in ss 200A, 201, 207, 209A and 373, as amended or inserted by the Bill) and 'prescribed person' (as used in ss 19, 22, 30, 61, 146 and 171, as amended or inserted by the Bill).

Incorporation of companies
Section 17 will be amended to replace the issue of a certificate of incorporation with the issue of a notice of incorporation and to provide for a right to apply for a certificate of confirmation of incorporation.

Section 19 will be amended for the following purposes:

1. to require persons desiring the incorporation of a company to submit prescribed information in addition to the memorandum and articles, prescribed documents and prescribed fee;
2. to require certain persons engaged in the formation of a company (eg an advocate and solicitor) or a person named as a secretary or director of the proposed company to forward, in place of the statutory declaration under the existing s 19(2) and the notary public's certificate under the existing s 19(3), a declaration as to compliance with the requirements of the Act and verifying the identities of the subscribers and officers of the company;
3. to remove the requirement for the memorandum or articles to contain the names of at least two directors of the proposed company; and
4. to replace the issue of a certificate of incorporation under the hand and seal of the Registrar with the issue of a notice of incorporation in the prescribed form and, upon application of the company, a certificate of confirmation of incorporation under the hand and seal of the Registrar.

Section 22 will be amended to remove the requirement that the memorandum of a company must be printed and divided into numbered paragraphs, and to replace the handwritten statement as to the number of shares a subscriber agrees to take with a declaration of the same. A new s 22(4) will be inserted requiring a signed copy of the memorandum to be kept by the company.

Section 23 will be amended to replace the issue by the Minister of a licence to a company empowering it to hold land with an approval by the Minister of the same. New Section 23(5) provides that a certificate confirming such approval shall be issued by the Registrar on application and payment of a fee.

Section 26 will be amended to replace the certificate of the Registrar, as to registration of a court order affecting the memorandum of the company, with a notice of such registration.

Section 398 will be amended to provide that a notice of incorporation, or certificate of confirmation of incorporation, issued under the Act is conclusive evidence that the company concerned is duly incorporated under the Act.

Name of company: registration of and changes to 
Section 27 will be amended so that it will no longer be a ground for refusal of registration of a company's name on the basis that the name so nearly resembles that of another company or a business as to be likely to be mistaken for it. The Registrar may, upon application made within 12 months from the date of incorporation, direct the company with such a name or a name which cannot be registered by virtue of sub-s (1) to change it, and may require it to pay a fee if the application for the registration of the company by that name was made in bad faith. The section is also amended to remove, as a ground for refusal of registration of a company by a certain name, the ground that the name so closely resembles a reserved name as to be likely to be mistaken for that name.

Section 28 will be amended:

1. to replace, in the case of an approval by the Registrar of a change of name of a company, the issue of a certificate of incorporation under the new name with the issue of a notice of the same;
2. to empower the Registrar to direct a company to change its name if the name is a name prohibited under s 27(1) or is one that so nearly resembles that of another company or corporation or a business name as to be likely to be mistaken for it; and
3. to provide for a right to apply for a certificate confirming incorporation of the company under the new name.

Section 29 will be amended to replace the issue by the Minister of a licence to a company directing or authorising it to be registered under, or to have its name changed to, a name without the word 'Limited' or 'Berhad', with an approval by the Minister of the same. New s 29(9) provides that a certificate confirming such approval shall be issued by the Registrar on application and payment of a fee.

Change in status of company
Section 30 will be amended as follows:

1. to remove the requirement for an application for a change of status of a company to be made in writing;
2. to replace the certificate of incorporation bearing the new status with a notice of the same; and
3. to replace the statutory declaration as to assent by members to the change of status with a declaration of the same, and to allow a prescribed person authorised by the company to make such declaration.

Section 31 will be amended:

1. to replace the statutory declaration of compliance with s 61(2)(b), to be given in support of an application to convert a private company to a public company, with a declaration of the same;
2. to replace the certificate of incorporation bearing the new status with a notice of the same; and
3. to require a company, which has been issued such a notice, to lodge with the Registrar a list of shareholders of the company.

Section 32(3)(c)(ii) will be amended to replace the statutory declaration of compliance with s 61(2)(b), to be lodged by a company with the Registrar after a court or the Registrar has determined that the company has ceased to be a private company, with a declaration of the same.

Articles of association
Section 35 will be amended to enable requirements as to articles of a company to be prescribed in regulations and to require a company to lodge a notice of any change to the registered number of its members.

Restrictions on commencement of business
Section 61 will be amended to replace:
(a) the statutory declaration by an officer of the company, to be lodged before a company may commence business or exercise its borrowing powers, with a declaration of the same; and (b) the certificate by the Registrar, as to entitlement of a company to commence business and exercise its borrowing powers, with a notice by the Registrar of the same.

Return as to allotments
Section 63 will be amended:

1. to exclude the application of sub-s (1), which requires the lodgment of a return of allotments when a company allots shares, in a case where shares are issued without formal allotment to subscribers;
2. to shorten the period within which a company may lodge a return of allotments of shares to 14 days after an allotment;
3. to limit the number of members, the particulars of whom are to be included in the return of allotments, to 50 in a case where there are more than 50 members following the allotment; and
4. to provide that particulars of members need not be provided in the return of allotments where the company is listed on a stock exchange.

Section 198 (exemption from filing list of members with annual return for certain public companies) will be repealed as it is no longer necessary in view of the proposed amendments to s 63.

Power of company to alter its share capital
Section 71 will be amended by inserting new sub-s (1A) to give a company the right to lodge with the Registrar a notice of certain alterations made to its memorandum as to its share capital.

Reduction of share capital
Section 73(7) will be amended to replace the certificate of the Registrar, confirming lodgment of a court order confirming the reduction of share capital, with a notice of the same.

New provision: notice of transfer of shares
A new s 128A will be inserted which enables a company to lodge with the Registrar a notice of a transfer of shares.

Registration of charges
Section 131 will be amended as follows:

1. to replace the statement and affidavit to be lodged with the Registrar, for the registration of a charge, with a statement containing prescribed particulars of the charge; and
2. to limit the duty to produce the instrument creating the charge for the Registrar's inspection to a case where the Registrar requests for it.

Section 134 will be amended to replace the certificate of registration of a charge with a notice of the same, and to provide for the right to apply for a certificate confirming such registration.

Section 136 will be amended to replace the memorandum of satisfaction of debt or the release of property from a charge with a statement of the same.

Directors
Section 145 will be amended:

1. to delete s 145(3) which requires the first directors of a company to be named in the memorandum or articles of the company; and
2. to insert in s 145(6), which sets out exceptions to the rule under s 145(5) prohibiting a director of a company from resigning unless there are at least two directors remaining in the company one of whom is resident in Singapore, a reference to s 149A (disqualification of directors of companies wound up on grounds of national security or interest).

Section 146 will be amended to replace the written consent under sub-s (1) to act as director with a declaration of consent, and sets out certain persons who may make the declaration on behalf of the director. Paragraphs (a) to (d) of s 146(1) will also be amended to replace the statutory declarations and signed undertakings in those paragraphs with declarations and undertakings of the same.

Section 171(1B) will be amended to replace the consent to act as a secretary with a declaration of such consent, and sets out certain persons who may make the declaration on behalf of the secretary.

Section 173 will be amended:

1. to remove the requirement to state, in the register of officers of a company, information concerning other occupations of the directors and their directorships of public companies;
2. to require the register to contain the signed consent of the secretary to act as such and any documentary evidence of any change in name of a director;
3. to provide that the register may be inspected by the Registrar;
4. to remove the requirement to lodge a return, with the Registrar, with the particulars of the register within a month after incorporation;
5. to clarify that a company is required, when a person becomes disqualified from being a director, to lodge a return with the Registrar notifying him of this;
6. to give a director, who resigns from office or who becomes disqualified from acting as such under s 148 (restriction on undischarged bankrupt being director or manager) or s 155 (disqualification for persistent default in relation to delivery of documents to Registrar), the right to lodge the return with the Registrar; and
7. to give the Registrar the right to remove the name and particulars of the director from any register kept by him if he reasonably believes that the director has become disqualified from acting as such by virtue of s 148 or 155.

Annual return
Section 197 will be amended:

1. to provide that the annual return by a company with a share capital is to be made in the prescribed form instead of in the form set out in Part II of the Eighth Schedule which is to be deleted;
2. to remove the requirement that the annual return by such a company is to be signed by a director or by the manager or secretary of the company; and
3. to provide that the annual return by a company without a share capital is to be made in the prescribed form.

Part II of the Eighth Schedule will be deleted as the form of the annual return is to be prescribed by regulations.

Accounting Standards to replace Ninth Schedule
A new s 200A will be inserted that establishes an Accounting Standards Committee which is responsible for prescribing corporate accounting standards (referred to as the Accounting Standards). The Accounting Standards so prescribed will replace the Ninth Schedule.

The Ninth Schedule will be repealed and replaced by Accounting Standards prescribed by the Accounting Standards Committee.

Accounts and audit
Section 201 will be amended:

1. to require accounts and consolidated accounts prepared by a company to be in compliance with the Accounting Standards;
2. to provide that a company that is a holding company need not provide its profit and loss statement, but must provide consolidated accounts of the group and a balance sheet of itself;
3. to give a company the right to apply to the Registrar to waive a requirement of the Accounting Standards, and the Minister the power to make an order substituting other accounting standards for the Accounting Standards for specified companies; and
4. to provide that compliance with any requirement of the Accounting Standards may be departed from, subject to the agreement of the auditor of the company, where the compliance will result in the accounts or consolidated accounts not giving true and fair view of certain specified matters.

Section 202 will be amended to provide that that provision (application to Registrar for relief from requirements as to form and content of accounts and report) does not extend to a requirement of the Accounting Standards.

Section 207 will be amended to remove the requirement for auditors to certify that the statutory registers of a company have been kept in accordance with the Act, and makes certain other amendments to that section which are consequential upon the amendments to s 201.

Section 209A will be amended to replace references to the Ninth Schedule with the Accounting Standards.

Lodgement of 'office' copy of court orders to be substituted with copy of order
Sections 262(2), 276(6), 279(3), 308(7), 332(6) and 343(2) will be amended to replace the requirement to lodge an office copy of a court order with the Registrar with a requirement to lodge a copy of the same with him.

Winding up
Section 291 will be amended to replace the statutory declaration, which is to be lodged with the Registrar before the appointment of a provisional liquidator, with a declaration in the prescribed form.

Section 293(1) will be amended to replace the statutory declaration of solvency, which is to be lodged with the Registrar before a company is voluntarily wound up, with a declaration of the same.

Section 317 will be amended to provide that a liquidator is to lodge with the Registrar a notice setting out an account of his receipts and payments and the position in the winding up, in place of an account and statement verified by a statutory declaration of those matters.

Foreign companies
Section 368(1) will be amended to remove the requirement to lodge with the Registrar a statutory declaration by agents for the registration of a foreign company to commence business in Singapore.

Section 370 will be amended to replace the written notice by a foreign company of its agent ceasing to be such with a notice in the prescribed form.

Section 371 will be amended to replace the certificate of registration of a foreign company by the Registrar with a notice of such registration.

Section 372(3) will be amended to require a foreign company without a share capital to lodge a notice with the Registrar if there is a change to the number of members registered with him.

Section 373 will be amended:

1. to replace the statutory declaration required to be lodged with the Registrar and verifying that copies of balance sheet and other documents lodged with the Registrar are true copies, with a declaration of the same;
2. to require a foreign company to lodge a profit and loss statement that is in compliance with the Accounting Standards; and
3. to give the Minister the power to make an order to substitute other accounting standards for the Accounting Standards for specified foreign companies.

Section 374 (as to fee payable on registration of foreign company because of establishment of a share register in Singapore) as the requirement to pay fees on increase of share capital will be removed.

Section 401 will be amended by inserting new sub-s (2A) which makes it an offence for anyone to lodge with the Registrar any document which he knows is false or misleading in a material respect.

Terrorism (Suppression of Financing) Bill 2002 (B18/2002)
The Terrorism (Suppression of Financing) Bill 2002 seeks to suppress the financing of terrorism, to enable Singapore to ratify and give effect to the International Convention for the Suppression of the Financing of Terrorism adopted by the General Assembly of the United Nations on 9 December 1999 ('the Convention'), which Singapore signed on 18 December 2001, and to make a related amendment to the Monetary Authority of Singapore Act (Cap 186).

When passed into law, the Bill will impose the following prohibitions:

• prohibition against providing or collecting property for terrorist acts;
• prohibition against provision of property and services for terrorist purposes;
• prohibition against use or possession of property for terrorist purposes; and
• prohibition against dealing with property of terrorists.

The Bill also seeks to impose the following duties:

1. Every person in Singapore and every citizen of Singapore outside Singapore who (i) has possession, custody or control of any property belonging to any terrorist or terrorist entity; or
   (ii) has information about any transaction or proposed transaction in respect of any property belonging to any terrorist or terrorist entity, shall immediately inform the Commissioner of Police of that fact or information.
2. Any person or class of persons may be required to determine on a continuing basis whether they are in possession or control of property owned or controlled by or on behalf of any terrorist or terrorist entity.

In either case, no criminal or civil proceedings shall lie against a person for disclosing information or making a report in good faith.

The Bill also provides for the seizure, freezing and confiscation of terrorist property.

When passed into law, the Bill will also make a related amendment to s 27A of the Monetary Authority of Singapore Act (Cap 186). The primary change is that
s 27A will be amended to empower the Monetary Authority of Singapore ('the MAS') to make regulations concerning any financial institution or class of financial institutions, or relating to the activities of any financial institution or class of financial institutions, as the MAS considers necessary to discharge or facilitate the discharge of any obligation binding on Singapore by virtue of a decision of the Security Council of the United Nations.

Presently, s 27A only empowers the MAS to issue directions to a financial institution or class of financial institutions for this purpose.

Further, s 27A will expressly provide that a financial institution will not, in carrying out any act in compliance with any direction or regulations made by the MAS, be treated as being in breach of any rule of law, written law or contract.

Elizabeth Wong
Allen and Gledhill