Companies Act 1967 · 2020 Revised Edition · Part 3 · Constitution of Companies
25C. Constitutional limitations: transactions with directors or their associates
Last amended by an amending law of 2014.
Official textFrom Singapore Statutes Online, unchanged
This section applies to a transaction if or to the extent that its validity depends on section 25B.
Nothing in this section is to be construed as excluding the operation of any other written law or rule of law by virtue of which the transaction may be called in question or any liability to the company may arise.
company
“company” means a company incorporated under this Act or under any corresponding previous written law;
Where —
a company enters into such a transaction; and
the parties to the transaction include —
a director of the company or of its holding company; or
a person connected with any such director,the transaction is voidable at the instance of the company.
Whether or not it is avoided, any such party to the transaction as is mentioned in subsection (3)(b)(i) or (ii), and any director of the company who authorised the transaction, is liable —
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;
to account to the company for any gain the party or the director has made directly or indirectly by the transaction; and
to indemnify the company for any loss or damage resulting from the transaction.
The transaction ceases to be voidable if —
restitution of any money or other asset which was the subject matter of the transaction is no longer possible;
the company is indemnified for any loss or damage resulting from the transaction;
rights acquired bona fide for value and without actual notice of the directors exceeding their powers by a person who is not party to the transaction would be affected by the avoidance; or
the transaction is affirmed by the company.
A person other than a director of the company is not liable under subsection (4) if the person shows that at the time the transaction was entered into the person did not know that the directors were exceeding their powers.
Nothing in subsections (1) to (6) affects the rights of any party to the transaction not within subsection (3)(b)(i) or (ii); but the court may, on the application of the company or any such party, make an order affirming, severing or setting aside the transaction on such terms as appear to the court to be just.
In this section, “transaction” includes any act.
Terms defined in s 4
company
Defined · s 4“company” means a company incorporated under this Act or under any corresponding previous written law;
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;
Part 4
Shares, Debentures and Charges
Part 5
Management and Administration
Part 6
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