We have seen cases whereby clients have confused the roles of shareholders and directors. In this article, we will be explaining the roles and powers of the shareholders and the directors.
The shareholders are the owners of the company. The directors, on the other hand, are the management of the company. Thus the management powers are supposed to be held by the board. By board, we are usually referring to the company’s board or the board of directors.
According to section 157 (A) of the Companies Act,
(1) The business of a company shall be managed by, or under the direction or supervision of, the directors.
(2) The directors may exercise all the powers of a company except any power that this Act or the constitution of the company requires the company to exercise in general meeting
This shows that the management (i.e. day to day running of the company) is “under the direction or supervision” of the directors.
The directors have certain duties which they must follow and we will cover this in another article.
The directors can exercise their power to run the company in a manner which is in the best interests of the company and if they require shareholder approvals on certain matters, they can call for a general meeting to be called for resolutions to be passed.
If the shareholder thinks that the directors of the company are not doing a good job, they can pass resolutions to vote the directors out at a general meeting. Other than that, the shareholders are not supposed to be involved in the day to day running of the company.
If you require assistance in lodging charges and other related matters, you can contact [email protected].
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Singapore Secretary Services
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