More transparency in the ownership and control of corporate entities
On 10 March 2017, Parliament passed the Companies (Amendment) Bill and Limited Liability Partnerships (Amendment) Bill. The amendments in these Bills will take effect in phases. A key legislative amendment which takes effect from 31 March 2017 requires all corporate entities, namely companies, foreign companies and limited liability partnerships (LLPs) (unless exempted by legislation1) to maintain a register of beneficial owners (termed as registrable controllers”). Companies will also be required to maintain a register of nominee directors.
Greater Transparency of Ownership and Control
With money laundering, terrorist financing and tax evasion being of global concern, knowing who the controllers of business entities are, is gaining international importance. This legislative change aims to make the ownership and control of corporate entities more transparent and reduce opportunities for the misuse of corporate entities for illicit purposes. This will also bring Singapore in line with international standards to combat money laundering and terrorist financing, and facilitate tax transparency. It will further boost Singapore’s on-going efforts to maintain our strong reputation as a trusted and clean financial hub.
The registers that corporate entities are expected to keep are:
Registers of Controllers (non-public)
Singapore incorporated companies and foreign companies registered in Singapore must maintain a register of their controllers. A “controller” is an individual or a legal entity that has significant interest in or significant control over an entity. What constitutes significant control and significant interest is spelt out in the Bills. This register is not open to the public.
Registers of members of foreign companies (public)
Foreign companies registered in Singapore must now maintain a public register of their members. This brings them in alignment with Singapore incorporated companies.
Registers of nominee directors (non-public)
Singapore incorporated companies must now maintain a register of their nominee directors. This register is not open to the public.
Although the registers relating to controllers and nominee directors will be kept only by the corporate entity and will not be made available to the public, they can be inspected by the Accounting and Corporate Regulatory Authority (ACRA) and other public agencies administering or enforcing any written law (including law enforcement agencies) upon request.
Transitional Arrangements for New and Existing Companies, Foreign Companies and LLPs
To help companies, foreign companies and LLPs prepare to comply with this new requirement, these existing corporate entities will have a transitional period of 60 days from the date of commencement of the new law (31 March 2017) after which they must maintain the register of controllers. Companies, foreign companies and LLPs incorporated/registered after 31 March 2017 will have a transitional period of 30 days. In general, the duty to maintain such registers requires these corporate entities to send notices querying relevant parties about the existence of controllers, and to record the responses received in the register of controllers. These corporate entities are not in breach of the duty should recipients fail to respond or respond inaccurately.
Help Resources for Companies, Foreign Companies and LLPs
Companies, foreign companies and LLPs can tap on the following help resources:
(a) ACRA-issued guidance for companies, foreign companies and LLPs on how to comply with the requirements.
(b) Forms of notice that companies, foreign companies and LLPs can use to send via hardcopy or electronically, to their shareholders, directors or partners, and any other relevant persons to assist them in obtaining the information required for their register of controllers.
(c) Detailed information on these new requirements is available on ACRA’s website at www.acra.gov.sg/CA_2017. This includes relevant subsidiary legislation, frequently asked questions and a video on how to set up the registers.
(d) The public can also contact the ACRA Helpdesk at 6248 6028 or via www.acra.gov.sg/askacra.
– June 28, 2017 –
Credit to Enterpreneurs’ Digest