On 6 May 2026, key provisions of the Corporate and Accounting Laws (Amendment) Act 2025 commenced operation in Singapore. This is one of the most significant updates to the Companies Act in recent years — and if your company has not yet reviewed its governance arrangements, you are already behind.

The changes are not incremental. The maximum fine for breaching director duties under Section 157 of the Companies Act has quadrupled from S$5,000 to S$20,000. Imprisonment of up to 12 months has been added as a possible sanction. Individuals convicted of money-laundering offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (CDSA) are now automatically disqualified from holding directorships. And audit reports issued for financial years ending on or after 6 May 2026 must identify the engagement partner responsible — by name.

This article summarises what commenced on 6 May 2026, what it means in practice, and the concrete steps every Singapore director — resident, nominee, or foreign — should take immediately.

Background: The Corporate and Accounting Laws (Amendment) Act 2025

Parliament passed the Corporate and Accounting Laws (Amendment) Act 2025 (the Act) on 8 October 2025. The Act amends the Companies Act 1967, the Accountants Act 2004, the Accounting and Corporate Regulatory Authority Act 2004, and several related statutes. ACRA announced on 16 April 2026 that a first tranche of provisions would commence on 6 May 2026, with further phases to follow.

SSS published a general overview of the Act at the time of passing — see our article Corporate & Accounting Laws Amendment Act 2025: Key Changes. This article focuses on what actually commenced on 6 May 2026 and the immediate practical implications.

Change 1: Section 157 Director Duties — Fines Quadrupled, Imprisonment Added

Section 157 of the Companies Act imposes three core duties on every director:

  • Act honestly and use reasonable diligence in the discharge of duties (Section 157(1)).
  • Not make improper use of information or position to gain advantage for oneself or another, or to cause detriment to the company (Section 157(2)).

Before 6 May 2026, a breach of Section 157(1) or (2) carried a maximum fine of S$5,000. From 6 May 2026, the penalty under Section 157(3)(b) is a fine not exceeding S$20,000 or imprisonment for a term not exceeding 12 months, or both. Civil liability for damages and profits also remains.

This four-fold increase in the maximum fine — and the addition of a custodial sentence — signals a clear policy shift. ACRA has consistently emphasised that it expects directors to exercise genuine oversight, not merely to lend their name to a register. Passive directorships — where a nominee director attends no board meetings, reviews no financials, and rubber-stamps decisions — are now squarely in the crosshairs of a more punitive enforcement regime.

What “reasonable diligence” now demands

The duty of reasonable diligence under Section 157(1) is not a passive one. Courts have consistently interpreted it as requiring a director to:

  • Attend board meetings and review board papers.
  • Be familiar with the company’s financial position, even if not a finance professional.
  • Ask questions when something appears irregular.
  • Ensure the company complies with applicable laws and maintains proper accounting records.

With a potential S$20,000 fine and imprisonment on the table, the cost-benefit calculus for accepting nominee director appointments without meaningful engagement has changed fundamentally. Directors — and the corporate service providers that arrange such appointments — must review existing arrangements urgently.

Change 2: AML Disqualification — CDSA Convictions Now Bar Directorships

Singapore has been strengthening its anti-money laundering (AML) framework in line with the Financial Action Task Force (FATF) standards. The 6 May 2026 amendments expand the list of offences that automatically disqualify individuals from holding directorships.

Specifically, individuals convicted of money-laundering offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (CDSA) are now automatically disqualified from acting as a director of any Singapore company. This is in addition to the existing disqualification grounds under Section 148 and Section 149 of the Companies Act (including for undischarged bankrupts and those convicted of fraud-related offences).

Implications for nominee director arrangements

Corporate service providers that supply nominee directors must now conduct enhanced due diligence checks on the individuals they appoint. Given that nominee directors are typically engaged “by way of business” and must be arranged through an ACRA-registered Corporate Service Provider (CSP) under the Corporate Service Providers Act 2024, the obligation to verify that a nominee director is not disqualified sits squarely with the CSP.

Companies that discover their existing director has a CDSA conviction should act immediately — a company that knowingly allows a disqualified person to act as director also faces regulatory exposure. Consult your company secretary for guidance on replacement procedures.

Change 3: Audit Reports Must Now Name the Engagement Partner

For financial years ending on or after 6 May 2026, audit reports must identify by name the public accountant primarily responsible for the engagement. Previously, audit reports were typically signed off in the name of the accounting firm, with the lead partner’s identity visible only to those who searched the ACRA register.

This change aligns Singapore with international best practice — jurisdictions including the United States, the United Kingdom, and Australia have required engagement partner identification in audit reports for several years. The rationale is accountability: named partners have greater personal incentive to maintain audit quality, and stakeholders can form a view about the track record of the individual responsible.

What this means for audit committees and boards

  • Audit committees should discuss with the engagement partner what the naming requirement means for the firm’s quality control processes and whether it affects the firm’s risk appetite for engagements.
  • Boards should ensure the updated audit report format is reflected in the engagement letter for audits of financial years ending on or after 6 May 2026.
  • Small companies near the audit-exempt threshold should note that the Small Company criteria (annual revenue not exceeding S$10 million, total assets not exceeding S$10 million, not more than 50 employees — satisfying two of three) remain unchanged. If your company qualifies as a small company, you remain audit-exempt regardless of this change.

What Is Still Pending: Further Phases of Commencement

Not all provisions of the Act commenced on 6 May 2026. ACRA has indicated further tranches will be announced separately. Provisions still pending commencement include, among others, amendments relating to the regulation of public companies and listed entities, and certain Accountants Act reforms. Boards should monitor ACRA’s news and announcements page for updates.

Director Action Checklist: What to Do Now

Given what commenced on 6 May 2026, every Singapore company director should:

  1. Review nominee director arrangements. If your company uses a nominee director, confirm the nominee is actively engaged — reviewing board papers, attending or being consulted on key decisions, and able to demonstrate reasonable diligence if ever questioned.
  2. Conduct a disqualification check. Your company secretary should verify that all current directors are not subject to any disqualification order, including the newly added CDSA grounds. This is especially important for companies in regulated industries or those with complex ownership structures.
  3. Update the D&O indemnity and insurance. With the increased financial exposure under Section 157, boards should review their Directors & Officers (D&O) liability insurance to ensure coverage is adequate under the new penalty regime.
  4. Brief your audit committee. If your company is audited, discuss the engagement-partner naming requirement with your auditors and confirm the updated report format for the current financial year.
  5. Update board onboarding materials. Any standard induction pack for new directors should be revised to reflect the higher penalty thresholds and the expanded disqualification grounds.
  6. Review the annual compliance calendar. Ensure that all statutory deadlines — annual return filing, AGM requirements, financial statement preparation — are tracked and met. Non-compliance remains a key risk factor in any ACRA enforcement action.

Why the Timing Matters

The commencement of these provisions on 6 May 2026 was not preceded by a long grace period. ACRA announced the date on 16 April 2026, giving companies fewer than three weeks to prepare. This compressed timeline means that companies that did not act prior to commencement are already operating under the new regime.

Singapore has consistently signalled — through the Equities Market Review, the ongoing FATF evaluation cycle, and now the Corporate and Accounting Laws (Amendment) Act 2025 — that its approach to corporate governance and accountability is tightening. Directors who treat their appointments as administrative arrangements rather than active governance roles face a materially higher risk of personal liability than at any point in Singapore’s corporate history.

If you are uncertain about your obligations as a director or about the governance arrangements at your company, the time to seek advice is now — not after an ACRA inquiry or enforcement notice has arrived.

How Raffles Corporate Services Can Help

At Raffles Corporate Services, we provide comprehensive corporate secretarial services to Singapore companies, including governance reviews, nominee director services through properly registered channels, and compliance support under the updated Companies Act. Our team is experienced in helping boards navigate regulatory changes and implement practical governance improvements.

If you need to review your board composition, update your compliance programme, or understand what the 6 May 2026 changes mean for your specific situation, contact us today.

— The Editorial Team, Raffles Corporate Services