From 31st March 2017, it is compulsory for all companies, unless exempted, to have a Register of Controllers and a Register of Nominee Directors. The Accounting and Corporate Regulatory Authority (ACRA) or relevant government bodies like the police can compel a company to hand over these registers for inspection. If these registers are found not to be in order or missing, the company and its officers can be fined up to $5,000.
A nominee director is a registered director under ACRA who falls within the definition in section 386AL(8) of the Companies Act: “a director is a nominee if the director is accustomed or under an obligation whether formal or informal to act in accordance with the directions, instructions or wishes of any other person”.
This means that if a director is acting on behalf of another person, it may be a substantial shareholder or someone who is controlling the company, then he is a nominee director. The most common example will be in instances whereby foreigners who are shareholders of the company employ a nominee director to fulfil the requirement under the Companies Act of having at least one director who is an ordinarily resident in Singapore. Another common example would be a substantial shareholder employing an individual as a nominee director to vote in accordance with his wishes at board meetings.
So what needs to be done?
The nominee director must disclose his status as a nominee director to the company. He must also provide details of his nominator to the company.
For companies incorporated before 31st March 2017:
The nominee director must disclose his nominee directorship and his nominator’s particulars to the company within 60 days after 31 March 2017.
For companies incorporated on or after 31st March 2017:
the nominee director must disclose his nominee directorship and his nominator’s particulars to the company within 30 days after the date of the company’s incorporation.
Nominee directors who fail to make these disclosures can be fined up to $5,000. If the disclosure is already accurately recorded in the company’s registers, then the nominee director may choose not to disclose as the information is already up to date. For example, if the incorporation was done by a corporate service provider, the register would have been accurately prepared and if the nominee director knows that it is updated accurately, he has done his or her part.
2) Record Keeping
The nominee director will have to update the company with details of the nominator. These details must be recorded in the Register of Nominee Directors.
For nominators who are individuals, the following details are required:
- Full name and aliases (if any)
- Residential address
- Identity card number/ Passport number;
- Date of birth
- Date on which the director became the individual’s nominee
For nominators who are entities, the following details are required:
- Business registration number
- Address of registered office
- Legal form of the legal entity
- Jurisdiction where, and statute under which, the legal entity is formed or incorporated
- Name of the corporate entity register of the jurisdiction in which the legal entity is formed or incorporated
- Identification number or registration number of the legal entity on the corporate entity register of the jurisdiction where the legal entity is formed or incorporated
- Date on which the director became the legal entity’s nominee.
The register can be kept in hard or soft copy and is to be kept at the company’s registered office or at the office of the corporate service provider. The register must also have the accompanying supporting documents required.
- For nominators who are Singapore citizens or Singapore permanent residents, a copy of their NRIC is required.
- For nominators who are foreigners, a copy of their passport and a document to verify their residential address (Phone or utility bill).
- For nominators who are foreign entities not registered in Singapore, a copy of the certificate of registration from the nominator’s jurisdiction of incorporation and proof of address of the registered entity. Also, the personal particulars of the officers of the entity and their identification documents.
3) Disclosure and Inspection
The Register of Nominee Directors is not to be disclosed to any member of the public. The fine for such disclosure is $5,000.
The register, however, has to be made available to government agencies such as:
- Singapore Police Force
- Commercial Affairs Department
- Corrupt Practices Investigation Bureau
- Inland Revenue Authority of Singapore
The officers of these agencies are allowed to inspect and make copies of the Register of Nominee Directors and the supporting documents. Failure to allow the officers from these agencies to inspect the register constitutes as an offence.
The following types of companies are exempted from maintaining a Register of Nominee Directors. If your company is one of the following types, you do not have to maintain the register.
- Public companies whose shares are listed on an approved stock exchange in Singapore and its wholly-owned subsidiaries.
- Singapore financial institutions and its wholly-owned subsidiaries.
- Companies wholly-owned by the Singapore Government and its wholly-owned subsidiaries.
- Companies wholly-owned by statutory bodies established by or under a public Act for a public purpose and its wholly-owned subsidiaries.
- Companies which have their shares listed on foreign stock exchanges and which are subject to regulatory disclosure requirements and requirements relating to adequate transparency in respect of their beneficial owners.
The maintaining of registers is a very important activity which must be fulfilled. Singapore has very strict anti-money laundering and anti-terrorism financing laws and it is essential that we maintain a register to know who are the individuals who are running the company as well as the beneficial owners. It is important that all company directors understand the importance of maintaining updated Register of Controllers and Register of Nominee Directors.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Singapore Secretary Services
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