Walter Woon

Company Law – An Essential for Every Practitioner and Student in Singapore

At the heart of any economy, whether developed or undeveloped, are the workings of its company laws. For with company law comes a sense of structure and organisation, which underpins an essential manner of conduct of business. Company law is primarily statutory, and until recently, the respective Companies Act of many countries which have links through the Commonwealth with the British empire were substantially similar.

Singapore was no different. The Singapore Companies Act was almost identical to the 1948 English Companies Act. It also had substantial similarities with several of the Companies Act of the states of Australia, specifically the Victoria Companies Code and the New South Wales Companies Code. This short history leads to the essential point that for a long time, literature from the various Commonwealth jurisdictions, notably, the UK and Australia, were of tremendous assistance to us in Singapore.

In the last decade and a half or so, however, the company laws of the UK and Australia have started to diverge from that of Singapore, making the literature from these jurisdictions of somewhat limited value to us. I pause for a moment to clarify that the UK and Australia texts, cases and other literature continue to be useful, since it is only in diversity that we progress. Yet, there are increasing distinctions that can be drawn, stemming from, among other matters, the different cultural backgrounds that exist in Singapore. I say this despite the fact that one contributor to the book says that the ‘citation of authority in this book is of necessity somewhat eclectic’, as there are in her words ‘insufficient local authorities to cover the field even superficially’. Her comments are not without basis; yet, only a local book written by local legal experts with the Singapore lawyers in mind can be of true practical assistance.

Against this background, there is no question at all that a book that deals with Singapore company law is a necessity. I recall that when the first edition of this book was published in 1988, it was welcomed with open arms, despite the fact that the UK and Australian texts were of greater relevance then. There was nothing like having a local text, written by a man of tremendous brilliance, with perspectives drawn from the local arena tempered with international developments. The original author, Walter Woon, lectured in company law for several years. His classes were always filled with brainteasers and one of my favourite to attend. Whilst several of my classmates and I lamented the lack of a useful book, the notes that we took during his lectures and tutorials made up somewhat for this. Indeed, these notes often came in useful in my early days of practice, an indication of their practicality.

And the first edition of his book was no different. It was a useful basic text that provided detailed analysis and guided us through the practical applications. It was a tool for the practitioner and the student alike. Approximately five years or so after the first edition, I recall hoping that a second would come, and it did but a little later; building upon the first, and providing guidance on the enriched literature that was also developing in Singapore’s company law. Five years or so after the second edition, I once again started hoping for the third, since by then Singapore’s company law had started taking quite a different shape with an identity of its own emerging, and the case law from our Supreme Courts were increasing in number.

So it is with great relief perhaps, that this third edition is upon us; with one great difference – the original author has confined his input to the Preface. But as he rightly points out, ‘company law is not a philosophy; one cannot just sit in an office and write without knowing what is going on in the corporate and legal worlds. Both law and practice march on inexorably.’ And so it does! The third edition is written by a plethora of top lawyers who have done an excellent job in bringing us the latest developments of the laws.

This third edition is timely. It addresses important changes in the Companies Act brought about in the last six years or so, following recommendations made by the Corporate Finance Committee and the Committee on Company Legislation and Regulatory Framework. The recommendations of these committees have seen the provisions dealing with raising finance removed from the Companies Act and moved into a now not-so-new legislation titled the Securities and Futures Act. It has also seen the demise of the Securities Industry Act, with the provisions dealing with, inter alia, insider trading now collapsed into the Securities and Futures Act as well.

Additionally, the legislative changes made to the Companies Act now permit one-director companies, the doing away with annual general meetings, and the appointment of non-professionally qualified company secretaries for private companies. The book takes in all these changes, and also attempts to take in much of the amendments introduced in 2005. For instance, there is a brief but useful note on treasury shares, the provisions of which came into force on 30 January 2006. Finally, new forms of corporate entities have also been introduced, including the limited liability partnerships and the business trusts. The book deals with all these new matters 
and more.

Whilst the book is a welcome reprieve overall, there are some areas where a little more attention and a few more insightful discussions would have been useful. For instance, in the discussions of the business trusts and the limited liability partnerships, it could have been helpful if indications of where the enacting legislations were drawn from were provided, and perhaps a little comparative study of how the entities work in the jurisdictions which already have them. A thesis is not sought for, but just an additional paragraph or two.

Likewise, in some instances, more up-to-date and recent cases could be included in the discussions. For example, in the section on the different types of directors, it would have been useful for readers to know that there have been a number of cases which have discussed the role of non-executive directors, and the nature of the duty that they bring to bear. Another point to note is that a more comprehensive discussion of some of the recent local decisions, including the 2004 Vita Health case, for instance, would have been good. Perhaps this limited discussion can be attributed to the constraints 
of space.

All said and done, writing a company law book is anything but easy, and keeping it updated is an equally unenviable task, whether undertaken by one person or a group of people. Yet, with Dean Tan in the lead, this third edition of Walter Woon on Company Law will be a book that will see usage not matched by any other local book. Whether one is a lawyer practising corporate law or otherwise, it is a book to which frequent references will be made, for corporate law seeps into every area of practice. Litigation lawyers will definitely find this useful. Students will certainly find this book a panacea to guide them through the corporate maze and enable them to focus on practical problems that could arise, and not have to spend time gathering the primary material as many of us had to in the days before the appearance of the first edition. This is a book of unparalleled dimension and I, like many others for certain, look forward to more regular updates, given the fast-changing face of company law in Singapore.

Kala Anandarajah

Rajah & Tann

E-mail: kala.anandarajah@rajahtann.com