Companies Act 1967 · 2020 Revised Edition · Part 5 · Management and Administration
168. Payments to director for loss of office, etc.
Last amended by an amending law of 2014.
Official textFrom Singapore Statutes Online, unchanged
It is not lawful —
for a company to make to any director any payment by way of compensation for loss of office as an officer of the company or of a subsidiary of the company or as consideration for or in connection with his or her retirement from any such office; or
for any payment to be made to any director of a company in connection with the transfer of the whole or any part of the undertaking or property of the company,unless particulars with respect to the proposed payment, including the amount thereof, have been disclosed to the members of the company and the proposal has been approved by the company in general meeting and when any such payment has been unlawfully made the amount received by the director is deemed to have been received by him or her in trust for the company.
The requirement for approval by the company in subsection (1) does not apply in respect of any payment to a director holding a salaried employment or office in the company by way of compensation for termination of employment pursuant to an existing legal obligation arising from an agreement made between the company and the director if —
company
“company” means a company incorporated under this Act or under any corresponding previous written law;
the amount of the payment does not exceed the total emoluments of the director for the year immediately preceding his or her termination of employment; and
the particulars with respect to the proposed payment, including the amount thereof, have been disclosed to the members of the company upon or prior to the payment.
For the purposes of subsection (1A) —
an existing legal obligation is an obligation of the company, or any corporation which is by virtue of section 6 deemed to be related to the company, that was not entered into in connection with, or in consequence of, the event giving rise to the payment for loss of office; and
if paragraph (a) or (b) of that subsection is not complied with, the amount received by the director is deemed to have been received by him or her on trust for the company.
Where such a payment is to be made to a director in connection with the transfer to any person, as a result of an offer made to shareholders, of all or any of the shares in the company, that director must take all reasonable steps to secure that particulars with respect to the proposed payment, including the amount thereof, are included in or sent with any notice of the offer made for their shares which is given to any shareholders, unless those particulars are furnished to the shareholders by virtue of any requirement of law relating to take‑over offers or any requirement of the Take‑over Code mentioned in section 139 of the Securities and Futures Act 2001.
director
“director” includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors or the majority of the directors of a corporation are accustomed to act and an alternate or substitute director;
A director who fails to comply with subsection (2) and a person who has been properly required by a director to include in or send with any notice under this section the particulars required by that subsection and who fails to do so shall be guilty of an offence, and if the requirements of that subsection are not complied with any sum received by the director on account of the payment is deemed to have been received by him or her in trust for any person who has sold the person’s shares as a result of the offer made.
If in connection with any such transfer the price to be paid to a director of the company whose office is to be abolished or who is to retire from office for any shares in the company held by him or her is in excess of the price which could at the time have been obtained by other holders of the like shares or any valuable consideration is given to any such director, the excess or the money value of the consideration (as the case may be) is for the purposes of this section deemed to have been a payment made to the director by way of compensation for loss of office or as consideration for or in connection with his or her retirement from office.
Any reference in this section to payments to any director of a company by way of compensation for loss of office or as consideration for or in connection with his or her retirement from office does not include —
any payment under an agreement entered into before 1 January 1967;
any payment under an agreement particulars of which have been disclosed to and approved by special resolution of the company;
any bona fide payment by way of damages for breach of contract;
any bona fide payment by way of pension or lump sum payment in respect of past services, including any superannuation or retiring allowance, superannuation gratuity or similar payment, where the value or amount of the pension or payment, except insofar as it is attributable to contributions made by the director, does not exceed the total emoluments of the director in the 3 years immediately preceding his or her retirement or death; or
any payment to a director pursuant to an agreement made between the company and him or her before he or she became a director of the company as the consideration or part of the consideration for the director agreeing to serve the company as a director.
This section is in addition to and not in derogation of any rule of law requiring disclosure to be made with respect to any such payments or any other like payment.
In this section, “director” includes any person who has at any time been a director of the company or of a corporation which is by virtue of section 6 deemed to be related to the company.
corporation
“corporation” means any body corporate formed or incorporated or existing in Singapore or outside Singapore and includes any foreign company but does not include —(a)any body corporate that is incorporated in Singapore and is by notification of the Minister in the Gazette declared to be a public authority or an instrumentality or agency of the Government or to be a body corporate which is not incorporated for commercial purposes;(b)any corporation sole;(c)any cooperative society;(d)any registered trade union; (da)any platform work association registered under the Platform Workers Act 2024; or(e)any limited liability partnership;
Terms defined in s 4
company
Defined · s 4“company” means a company incorporated under this Act or under any corresponding previous written law;
corporation
Defined · s 4“corporation” means any body corporate formed or incorporated or existing in Singapore or outside Singapore and includes any foreign company but does not include —(a)any body corporate that is incorporated in Singapore and is by notification of the Minister in the Gazette declared to be a public authority or an instrumentality or agency of the Government or to be a body corporate which is not incorporated for commercial purposes;(b)any corporation sole;(c)any cooperative society;(d)any registered trade union; (da)any platform work association registered under the Platform Workers Act 2024; or(e)any limited liability partnership;
director
Defined · s 4“director” includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors or the majority of the directors of a corporation are accustomed to act and an alternate or substitute director;
emoluments
Defined · s 4“emoluments”, in relation to a director or auditor of a company, includes any fees, percentages and other payments made (including the money value of any allowances or perquisites) or consideration given, directly or indirectly, to the director or auditor by that company or by a holding company or a subsidiary of that company, whether made or given to the director or auditor in the director’s or auditor’s capacity as such or otherwise in connection with the affairs of that company or of the holding company or the subsidiary;
officer
Defined · s 4“officer”, in relation to a corporation, includes —(a)any director or secretary of the corporation or a person employed in an executive capacity by the corporation;(b)a receiver and manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and(c)any liquidator of a company appointed in a voluntary winding up,but does not include —(d)any receiver who is not also a manager;(e)any receiver and manager appointed by the Court;(f)any liquidator appointed by the Court or by the creditors; or(g)a judicial manager appointed under Part 7 of the Insolvency, Restructuring and Dissolution Act 2018;
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Financial Statements and Audit
Part 7
Arrangements, Reconstructions and Amalgamations
Part 8
Part 8A
Part 9
Investigations
Part 10
Dissolution
Part 10A
Transfer of Registration
Part 11
Various Types of Companies, Etc.
Part 11A
Register of Controllers, Nominee Directors and Nominee Shareholders of Companies
Part 12