On 6 May 2026, the Corporate and Accounting Laws (Amendment) Act 2025 (CALA 2025) commenced operation in Singapore. The changes it introduced are not merely technical adjustments — they represent the most significant tightening of director accountability under the Companies Act in a generation. Maximum fines for breaching core director duties have quadrupled, criminal imprisonment for serious breaches is now on the table, and new transparency requirements affect audit reports, share buybacks, and corporate service providers.

This article sets out a practical, actionable risk mitigation checklist that every Singapore company director should work through in the wake of CALA 2025. The goal is not legal theory — it is to help directors identify their exposure points and take concrete steps to reduce personal liability before problems arise.

What CALA 2025 Changed: The Five Key Shifts

Before working through the checklist, it helps to understand what has actually changed. CALA 2025 introduced five significant amendments relevant to directors:

1. Director Fines Quadrupled

The maximum fine for breaching the core director duty under Section 157 of the Companies Act — the duty to act honestly and use reasonable diligence — has increased from S$5,000 to S$20,000. More significantly, courts can now impose up to 12 months’ imprisonment for serious breaches. This is not a minor adjustment. The previous fine level had become so low that it was largely ignored by the market. The new figures are calibrated to deter.

2. Director Disqualification Extended

The grounds for director disqualification now include convictions under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA). Directors who are convicted of money-laundering offences — whether in Singapore or overseas — face automatic disqualification from acting as a director of any Singapore company. This is particularly relevant for directors of companies in the financial services, real estate, and corporate services sectors where AML exposure is higher.

3. Audit Report Transparency

Audit reports for companies that require statutory audit must now name the individual public accountant responsible for the engagement (not merely the audit firm). This change improves audit accountability and allows ACRA to better track audit quality at the individual auditor level. Directors should confirm that their appointed auditor is complying with this requirement in audit reports issued after 6 May 2026.

4. Selective Share Buybacks Now Require Special Resolution

Where a company undertakes a selective share buyback (buying back shares from specific shareholders rather than pro rata), CALA 2025 now requires both a special resolution (75% approval) and approval from the class of shareholders being bought out — excluding the shares that are the subject of the buyback from voting. This tightens the procedural requirements significantly and reduces scope for majority shareholders to disadvantage minorities through selective buybacks.

5. Corporate Service Providers Must Register with ACRA

From 6 May 2026, Corporate Service Providers (CSPs) — firms that provide company secretarial, incorporation, and nominee director services — must register with ACRA and comply with enhanced AML/CFT obligations. If your company uses an unregistered CSP for its corporate secretarial services, both the CSP and potentially the company face regulatory exposure. Directors should confirm that their company secretary and corporate service provider are ACRA-registered under the new regime.

The CALA 2025 Director Risk Mitigation Checklist

Work through each item below. This checklist is designed for both newly appointed directors and experienced directors reviewing their existing compliance posture.

Board Governance and Documentation

  • Review and update your director induction materials. Any induction pack or directors’ handbook should now reference the new Section 157 maximum fine (S$20,000) and the possibility of imprisonment for serious breaches. New directors must understand from day one that personal liability is real and material.
  • Ensure board minutes are substantive, not perfunctory. Under the higher-penalty regime, board minutes that demonstrate genuine director engagement — questions raised, alternatives considered, rationale recorded — are your first line of defence in any regulatory inquiry. Minutes that simply record “the directors resolved” without context offer much weaker protection.
  • Review board meeting frequency and quorum. Directors who attend board meetings regularly and participate actively demonstrate the “reasonable diligence” standard required under Section 157. Directors who repeatedly miss meetings or rubber-stamp decisions face greater exposure.
  • Confirm your ACRA register entry is current. Your personal particulars — address, nationality, identification number — must be accurate on the ACRA register. Directors are personally responsible for notifying ACRA of changes within 14 days. Inaccurate register entries are a separate compliance failure. See our compliance calendar for all key deadlines.

Financial Oversight

  • Obtain and read the last three years’ financial statements. A director who cannot explain the company’s financial position, key liabilities, and cash position is not meeting the reasonable diligence standard. If you have been appointed recently, ask the company secretary to brief you fully.
  • Understand the company’s current cash position and near-term liabilities. If the company is in financial difficulty or approaching insolvency, director duties intensify significantly. Directors of financially distressed companies face personal liability for insolvent trading if they allow debts to be incurred when there is no reasonable prospect of repayment.
  • Confirm all ACRA filings are current. Annual returns, financial statements, and XBRL filings that are overdue represent unresolved director liability exposure. Our guide on XBRL filing with ACRA sets out who is required to file and the applicable deadlines.
  • Verify the UBO (Register of Registrable Controllers) is accurate. Directors are responsible for maintaining the company’s Register of Registrable Controllers. Changes in beneficial ownership must be updated within prescribed periods. ACRA actively enforces this requirement.

Insurance and Indemnity

  • Review your Directors’ and Officers’ (D&O) liability insurance policy. D&O insurance typically covers defence costs and certain claims arising from alleged wrongful acts in the director’s capacity. Review whether the policy limit remains adequate given the higher fine exposure under CALA 2025. Note that D&O policies typically exclude deliberate fraud and intentional criminal acts — they do not provide unlimited cover.
  • Check whether “run-off” cover is in place for former directorships. If you have resigned from a company’s board, your liability for acts committed during your tenure continues. Confirm that run-off coverage extends beyond your resignation date.
  • Review indemnity provisions in the company’s constitution. Many companies include indemnification provisions for directors. Confirm these are present and adequate — and understand that statutory limits mean indemnities cannot protect against certain categories of liability (e.g., criminal fines).

Corporate Service Provider Compliance

  • Confirm your corporate secretary / CSP is ACRA-registered. With the new CALA 2025 CSP registration requirement in force, using an unregistered provider exposes your company to regulatory risk. This is a straightforward check: ask your corporate secretary for their ACRA CSP registration number.
  • For nominee directors: confirm information flows from the nominator. Nominee directors carry the same legal duties as executive directors. If you are a nominee director, ensure you have contractual rights to information from the nominator — and that you exercise them. Signing documents without genuine engagement with their content is not a defence. Our guide on nominee director requirements in Singapore sets out the legal position.
  • Screen co-directors for AML/CDSA disqualification risk. Given the new CDSA-related disqualification ground, boards should satisfy themselves that all directors (and proposed new directors) have been screened for relevant convictions.

Audit and Financial Reporting

  • Confirm your auditor names the individual public accountant in audit reports. For companies subject to statutory audit, audit reports issued after 6 May 2026 must name the individual responsible for the engagement. If your auditor’s recent report does not comply, raise it with them promptly.
  • Review whether the audit exemption applies to your company. Given ACRA’s ongoing review of the audit exemption thresholds, it is worth confirming whether your company qualifies for exemption and whether a voluntary audit remains appropriate.

Share Buybacks

  • If any selective share buyback is planned, ensure proper authorisation. Any selective buyback now requires a special resolution plus class approval (excluding the target shares). Directors who proceed with a selective buyback without proper shareholder approval expose themselves and the company to enforcement action. Our guide on treasury shares in Singapore covers the buyback framework.

What Counts as “Reasonable Diligence” Under the New Regime?

The Section 157 duty requires directors to act honestly and use “reasonable diligence” in the discharge of their duties. The higher fine and imprisonment risk under CALA 2025 raises the stakes for falling short. Courts look at a range of factors in assessing whether a director exercised reasonable diligence:

  • Whether the director attended board meetings and engaged substantively with the matters discussed
  • Whether the director sought professional advice (legal, accounting, or otherwise) where the situation warranted it
  • Whether the director raised concerns in writing when they had reservations about a proposed course of action
  • Whether the director maintained adequate oversight of management without micromanaging day-to-day operations
  • Whether the director ensured the company’s compliance infrastructure (company secretary, corporate service provider, auditor) was fit for purpose

For directors managing business investment decisions across multiple portfolio companies, the lesson is consistent: active, documented engagement with board processes is the foundation of director protection.

When to Escalate to Legal Counsel

Some situations warrant immediate legal advice rather than internal review alone. Directors should escalate promptly where:

  • The company is insolvent or approaching insolvency and incurring new liabilities
  • Fraud, misappropriation, or financial irregularities are suspected in the company
  • A director has received or anticipates receiving an ACRA enforcement notice or inspector’s inquiry
  • A proposed transaction (including a selective share buyback or related-party arrangement) raises questions about director conflict of interest
  • A director is uncertain whether a proposed action falls within their authority under the company’s constitution

If you need legal advice on your obligations as a Singapore company director, we can help point you in the right direction.

For the latest Singapore business regulatory news, including ACRA enforcement updates and corporate governance developments, Little Big Red Dot covers these topics regularly.

To speak with the team at Raffles Corporate Services, you can email [email protected] or call, SMS, or WhatsApp +65 8501 7133. We are happy to assist with any queries.

— The Editorial Team, Raffles Corporate Services