Singapore legislation

Clause 6

Repeal and re-enactment of section 18, and new section 18A

Section 18 of the principal Act is repealed and the following sections substituted therefor:“Maintenance of reserve fund by finance companies18.—

(1)

Every finance company shall —

(a)

maintain a reserve fund;

(b)

transfer to that reserve fund out of the net profits of each year, after due provision has been made for taxation —

(i)

so long as the amount of the reserve fund is less than 50% of the paid-up capital, a sum not less than 50% of those net profits;

(ii)

so long as the amount of the reserve fund is not less than 50% but less than 100% of the paid-up capital, a sum not less than 25% of those net profits; and

(iii)

so long as the amount of the reserve fund is 100% or more of the paid-up capital, a sum not less than 5% of those net profits.(2) Any finance company which fails to comply with subsection (1) shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine of $2,000 for every day during which the offence continues after conviction.Maintenance of adequate provision for bad and doubtful debts18A. Every finance company shall make provision for bad and doubtful debts and, before any profit or loss is declared, ensure that the provision is adequate.”.

Read in full context — Finance Companies (Amendment) Bill →