Draft BDO Raffles Newsletter April 2005.pmd

BDO RAFFLES CONNECTMerger of Registry of Companies and Businessesand Public Accountants Board was completed on 1April 2004 as well as the operation of theCompanies (Amendment) Act 2004. The followingare some of the amendments reflected in the Act:-(Implementation of 2nd Phase of the CLRFC’srecommendations)1. Share Capital and Shareholders(One shareholder and one directorcompanies)All private companies incorporated inSingapore are required to have at least oneshareholder and one director who is ordinarilyresident in Singapore instead of the current 2directors requirements. A newly incorporatedprivate company can register with one directorwho is a resident in Singapore and oneshareholder [Sections 17, 20A and 145(1)]. Thesole director and the company secretary cannotbe the same person to ensure there is noconflict of interest. [Section 20A, 145(1) & 171]2. Consolidated Accounts Financial Statements(not applicable to public listed company)A company need not prepare consolidatedaccounts financial statements if it is notrequired to do so under the AccountingStandards [Section 201]The directors of a holding company are nolonger required to receive the audited accountsof each subsidiary before issuing consolidatedaccounts, they should proceed to do so onlywhen they are satisfied that each subsidiary’saccounts are properly prepared forconsolidation purposes and present a true andfair view.3. Memorandum and Articles of AssociationA private company has full capacity to carry outany business activities or enter into anytransaction with full rights, powers andprivileges. However, it may restrict suchcapacity, rights, powers or privileges in itsMemorandum or Articles of Association [Section23]4. Miscellaneous Display of name/company registration numberThe Statutory requirement for everycompany to display its name outside itsoffice has been removed [Section 144(3)]Every company to have the registrationnumber in addition to its registered nameon all business letters, statements ofaccount, invoices, official notices andpublications of or purporting to be issuedor signed by or on behalf of the companyPublication of Company Name withregistration number in certain documents[Section 144]5. Other amendmentsA company is allowed to electronicallydDistributione of statutory reports, noticesand other documents to members, officersor auditors of the company under certainspecified conditions ,etc can be done byway of electronic transmission [Section173A]Private companies are allowed to raisecapital through private and exemptedofferings without the need to convert topublic companiesCompanies are statutorily conferred withthe powers of a natural person. The ultraviresdoctrine is abolished, except inspecified circumstancesAny person can now apply to the Ministerto be an approved liquidatorCompanies are no longer required to statethe objects of a company in itsMemorandum of AssociationUp coming news!There will be two more business structures inSingapore i.e. the Limited Partnership (LP) andLimited Liability Partnership (LLP) with the intentionto provide more option available for businessesand investments. LP is similar to a generalpartnership with at least one general partner withjoint and unlimited liability, whereas, LLP offers itsmembers with limited liability but retaining theflexibility to the business operation. LLP is alsoavailable to all types of businesses likeprofessionals and businessmen.Article contributed by Lim Swe Jian of our Corporate Secretarial DepartmentTel: 6828-9139 Fax: 6828-9111 Email: cheemei@bdo.com.sg8