The Role & Responsibilities of a Company Director in Singapore

The Role & Responsibilities of a Company Director in Singapore

Every Company that is registered with ACRA in Singapore will need a local resident director as one of the requirements. To incorporate a company, it requires at least a shareholder and a resident director, a company secretary, shares capital, and a registered office. Generally, there are different types of directorship in Singapore such as managing director, executive director, non-executive director, and nominee director. And each type of director holds different authority and powers in the company so as to maintain a fair and transparent system.

Who can be a Director?

A director is a person in charge of managing the affairs of the company, therefore, that individual must possess certain attributes to ensure that the company is properly managed.

Here are the basic requirements for a company director. He must be:

• At least 18 years old;
• Of full legal capacity;
• A Singapore Citizen, Singapore Permanent Resident, or EntrePass holder.
• A director may also be an Employment Pass (EP) holder. However, an EP holder wishing to become the director of a local company must first get a Letter of Consent (LOC) from the Ministry of Manpower
• Cannot be disqualified from acting as a director of a company e.g. an undischarged bankrupt.

What are the responsibilities of a company director?

A company director will be deemed as the executive director of the company regardless of the involvement in the business. Being appointed as a director of the company, there are fiduciary duties to uphold. The director has to ensure that all decisions make has to be in good faith and the benefits of the company.

Secondly, the director shall not place himself in circumstances whereby there is a conflict between his interests and the company. He/ She shall disclose interests in any transactions that have the potential of conflicts between personal and business interests.

Directors should manage their companies with care, skill, and diligence. Honesty and reasonable diligence are expected when directors carry out their duties.

Common statutory requirements under the Companies Act

Under the Companies Act, a Director is responsible to ensure the company complies with the Annual Compliance requirements on time.

1. Annual General Meeting (AGM) and Annual Return (AR)

It is mandatory for the company to file the Annual Return with ACRA after the AGM is held. Director is responsible to ensure that the company’s financial statements are ready and presented before its shareholders during the AGM within 6 months after the financial year-end for a private limited company. Failure to submit before the due date will incur a late filing penalty.

2. Keeping records of Statutory Registers

Common statutory registers include the Register of Directors & their shareholding, Register of Members, Register of Charges, and Register of Secretaries, & Auditors. The director has to ensure the registers are all kept up to date and available for inspection. Typically, this function will be outsourced to a company secretary to handle.

Besides, all accounting records and documents have to be safe-kept either in physical form or digital format. Under the law, the company is required to keep the accounting records for at least 5 years.

3. Reporting changes in Company Directors, Secretary, Auditors, and Managers

All changes in the company’s particulars or officers have to be lodge and update with ACRA. Proper documentation to effect the changes are also required to be endorsed by the company director.

4. Reporting changes in the Register for Directors Shareholdings

Any interests, whether it is in the form of shares, rights, options or contracts, that a Director may have in his company is recorded in this Register. It’s required by Law that a Director fully discloses his interest and give proper notice in writing to the company if there are any changes to be effected such that their respective corporate secretary could keep the Register properly updated.

What are the differences between a Company Director and Nominee Director?

A foreigner that wishes to establish a private limited company in Singapore needs to have a local resident director. And many times, they will seek professional firms to provide the nominee director services. A nominee director is an individual who consented to act as the director of the company in order to fulfill the incorporation requirements. As a common practice, the nominee director will have an agreement with the company that they will not involve in managing the company and operations. Additionally, they will be indemnified of all damages and liabilities.

However, from the viewpoint of ACRA and other authorities, the nominee director is also a representative of the company that will be liable for any non-compliances as well as the Role & Responsibilities of a company director in Singapore. As such, the nominee director will have to answer to the authority when issues arise.