The Singapore Companies Act (Cap. 50) (“Companies Act”) has been amended to introduce register of registrable controllers (“RRC”) of companies under the new Part XIA which came into effect on 31 March 2017. These amendments are accompanied by a new set of subsidiary legislation – the Companies (Register of Controllers and Nominee Directors) Regulations 2017 which also took effect on 31 March 2017.
The RRC makes the ownership and control of corporate entities more transparent and reduces opportunities for the misuse of corporate entities for illicit purposes. This will bring Singapore in line with international standards, and boost Singapore’s on-going efforts to maintain a strong reputation as a trusted and clean financial hub.
Unless exempted, all Singapore locally registered companies are required to take reasonable steps to identify the persons who have significant control over the company and maintain beneficial ownership information in the form of a RRC. The companies should make the RRC available to the officer from Accounting and Corporate Regulatory Authority of Singapore (“ACRA”) and other public agencies, upon request.
To help companies prepare to comply with this new requirement, existing companies will be given a transitional period of 60 days from the date of commencement of the new law (i.e. 31 March 2017) to set up the RRC, after which they must have and continue to maintain the required RRC. Companies incorporated on or after 31 March 2017 will have a transitional period of 30 days to set up the RRC.
A Controller is defined as an individual or a legal entity fulling at least one of the following conditions:
An individual controller is an individual who has a significant interest in, or significant control over, the company. While, a corporate controller is a legal entity which has a significant interest in, or significant control over, the company.
Companies are required to take ‘reasonable steps’ to find out and identify their controllers and obtain information on the controllers. The ‘reasonable steps’ means a company must minimally send out a notice to anyone whom they know or have reasonable grounds to believe to be controllers and anyone who know the identity of the controllers or is likely to have that knowledge annually.
Companies may send the notice electronically or in hardcopy format and this task can be undertaken by the company secretary. The notices do not have to be signed by a company director or secretary of the company before being sent out.
Companies are required to enter or update particulars of registrable controllers into their RRC within two (2) business days after the have been confirmed. If the particulars of a registrable controller are not confirmed, a company must enter or update the that the company has in its possession into register with a note indicating that the particulars have not been confirmed by the registrable controller.
The RRC is to be kept at the company’s registered office or the registered office of the registered filing agent appointed by the company for the purpose of keeping the RRC. The registers must be made available to the ACRA and public agencies administering or enforcing any written law (including Commercial Affairs Department of Singapore Police Force, Corrupt Practices Investigation Bureau and Inland Revenue Authority of Singapore).
Companies must not disclose or make available for inspection the RRC or any contained therein to any member of the public. Auditors are also not entitled to have access to the register.
For Registrable Individual Controllers
For Registrable Corporate Controllers
For a Person Receiving a Notice from a Company
The following locally incorporated companies are exempted:
(1)A public company which shares are listed for quotation on an approved exchange in Singapore;
(2)A company that is a Singapore financial institution;
(3)A company that is wholly owned by the Government of Singapore;
(4)A company that is wholly owned by a statutory body established by or under a Public Act for a public purpose;
(5)A company that is wholly owned subsidiary of a company mentioned in (1), (2), (3) or (4);
(6)A company which shares are listed on a securities exchange in a country or territory outside Singapore and which is subject to regulatory disclosure requirements and requirements relating to adequate transparency in respect of its beneficial owners, imposed through stock exchange rules, law or other enforceable means.
Companies that are undergoing winding up, receivership, judicial management, or striking off are not exempted, unless they qualify under one of the categories in (1) to (6).
The criteria in (1), (2) and (3) must be fulfilled before a controller may be considered as not registrable with respect to a company.
The requirement that controllers of a company must be “registrable” before their particulars are captured in the RRC of that company helps avoid duplicative reporting.
If individual X is a controller of a company Y only because he wholly owns company Z which in turn has an interest in 50% of the shares in company Y and company Z is required to keep a RRC, individual X is not a registrable controller which respect to company Y and so individual X’s particulars are not required to be contained in Company Y’s RRC.
Individual X’s particulars would instead be captured in Company Z’s RRC.
If individual X is a controller of a company Y not only because he wholly owns company Z which in turn has an interest in 50% of the shares in company Y, but also because he himself has an interest in 5% of the shares in Company Y, then individual X is a registrable controller with respect to company Y and so individual X’s particulars are required to be contained in Company Y’s RRC.
Individual X’s particulars would also be captured in company Z’s RRC.
If a company fails to comply with any of the applicable requirements in relation to the Register of Registrable Controller, the company and every officer of the company who is in default, shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding S$5,000.00 for each offence.