Companies (Amendment) Bill

This Act may be cited as the Companies (Amendment) Act 1986 and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

Section 4 of the Companies Act is amended —

by deleting the semi-colon at the end of the definition of “debenture” and by inserting the following “, but does not include —

a document that merely acknowledges the receipt of money by a corporation in a case where in respect of the money, the corporation issues, in compliance with section 44, a document prescribed by subsection (2) of that section and complies with the requirements of that section;

a document issued or executed by a banking corporation in the ordinary course of its banking business being a document that evidences or acknowledges indebtedness of the corporation arising in the ordinary course of that business;

a cheque, order for the payment of money or bill of exchange;

a promissory note having a face value of not less than $100,000;

for the purposes of the application of this definition to a provision of this Act in respect of which any regulations made thereunder provide that the word “debenture” does not include a prescribed document or a document included in a prescribed class of documents, that document or a document included in that class of documents, as the case may be;”;

by deleting the definition of “exempt private company” and substituting the following definition:“ “exempt private company” means —

a private company in the shares of which no beneficial interest is held directly or indirectly by any corporation and which has not more than 20 members; or

any private company, being a private company that is wholly owned by the Government, which the Minister in the national interest, declares by notification in the Gazette to be an exempt private company;”;

by inserting, immediately after the definition of “limited company”, the following definition:“ “listed company” means a corporation that has been admitted to the official list of a stock exchange in Singapore and has not been removed from that official list;”;

by inserting, immediately after the word “director,” in paragraph (a) of the definition of “officer”, the words “executive officer,”;

by inserting, immediately after the word “means” in the definition of “preference share”, the words “, subject to section 180(2),”;

by inserting, immediately after the word “prospectus,” in the definition of “prospectus”, the words “(including an abridged prospectus registered pursuant to section 47)”;

by deleting the definition of “trustee corporation” and substituting the following definition:“ “trustee corporation” means —

a company registered as a trust company under the Trust Companies Act (Cap. 207); or

a corporation, other than a trust company referred to in paragraph (a), that is a public company under this Act or under the laws of any other country which has been declared by the Minister to be a trustee corporation for the purposes of this Act;”;

by deleting the definition of “unit” and substituting the following definition:“ “unit”, in relation to a share, debenture or other interest, means any right or interest, whether legal or equitable, in the share, debenture or other interest, by whatever name called and includes any option to acquire any such right or interest in the share, debenture or other interest;”;

by deleting the words “Division 4” in the penultimate line of subsection (5) and substituting the words “Division 5”; and

by inserting, immediately after subsection (7), the following subsections:“As to what constitutes the affairs of a corporation(8) A reference in this Act to the affairs of a corporation shall, unless the contrary intention appears, be construed as including a reference to —

the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with another person or other persons and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with another person or other persons and including property held as agent, bailee or trustee), liabilities (including liabilities owed jointly with another person or other persons and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the corporation;

in the case of a corporation (not being a trustee corporation) that is a trustee (but without limiting the generality of paragraph (a), matters concerned with the ascertainment of the identity of the persons who are beneficiaries under the trust, their rights under the trust and any payments that they have received, or are entitled to receive, under the terms of the trust;

the internal management and proceeding of the corporation;

any act or thing done (including any contract made and any transaction entered into) by or on behalf of the corporation, or to or in relation to the corporation or its business or property, at a time when —

a receiver, or a receiver and manager, is in possession of, or has control over, property of the corporation;

a compromise or arrangement made between the corporation and another person or other persons is being administered; or

the corporation is being wound up,and, without limiting the generality of the foregoing, any conduct of such a receiver or such a receiver and manager, of any person administering such a compromise or arrangement or of any liquidator or provisional liquidator of the corporation;

the ownership of shares in, debentures of, and interests issued by, the corporation;

the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares in the corporation or to dispose of, or to exercise control over the disposal of, such shares;

matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the corporation or are or have been able to control or materially to influence the policy of the corporation;

the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of, or interests issued by, the corporation;

where the corporation has issued interests, any matters concerning the financial or business undertaking, scheme, common enterprise or investment contract to which the interests relate; and

matters relating to or arising out of the audit of, or working papers or reports of an auditor concerning, any matters referred to in any of the preceding paragraphs.

For the purposes of this Act wherever a reference to the affairs of a company or a foreign company appears it shall be construed as including a reference to the affairs of a corporation as defined in subsection (8).”.

The Companies Act is amended by inserting, immediately after section 5, the following sections:“Definition of ultimate holding company5A. For the purpose of this Act, a corporation is the ultimate holding company of another corporation if —

the other corporation is a subsidiary of the first-mentioned corporation; and

the first-mentioned corporation is not itself a subsidiary of any corporation.Definition of wholly owned subsidiary5B. For the purpose of this Act, a corporation is a wholly owned subsidiary of another corporation if none of the members of the first-mentioned corporation is a person other than —

that other corporation;

a nominee of that other corporation;

a subsidiary of that other corporation being a subsidiary none of the members of which is a person other than that other corporation or a nominee of that other corporation; or

a nominee of such subsidiary.”.

Section 8 of the Companies Act is amended —

by deleting the words “clerks and servants” in the third line of subsection (1) and substituting the words “or such other officers and employees”;

by deleting subsections (5) to (11), and by renumbering subsections (12) and (13) as subsections (5) and (6) respectively; and

by inserting, immediately after subsection (6) as renumbered, the following subsection:“(7) The Minister may by notification in the Gazette add to, vary or amend the Eighth Schedule in relation to the contents and form of the annual return of a company having a share capital.”.

The Companies Act is amended by inserting, immediately after section 8, the following sections:“Inspection of books of corporation8A.—

Where the Minister is satisfied that there is good reason for so doing, he may at any time —

give directions to a corporation requiring that corporation at such place and time as may be specified in the directions to produce such books relating to the affairs of a corporation as may be so specified; or

authorise any person (referred to in this section and sections 8B and 8C as an authorised person), on producing (if required so to do) evidence of his authority to require that corporation to produce to him any books relating to the affairs of a corporation which the authorised person may specify.

Where by virtue of subsection (1) the Minister or an authorised person has power to require the production of any books from a corporation relating to the affairs of a corporation the Minister or that authorised person shall have the like power to require production of those books from any person who appears to the Minister or authorised person to be in possession of them; but where any such person claims a lien on both books produced by him, the production shall be without prejudice to the lien.

Any power conferred by this section to require a corporation or other person to produce books relating to the affairs of a corporation shall include power —

if the books are produced —

to make copies of, or take extracts from, them; and

to require that person who is a present or past officer of, or is or was at any time employed by the corporation to provide an explanation of any of them;

if the books are not produced, to require the person required to produce them to state to the best of his knowledge and belief, where they are.

A statement made by a person in compliance with a requirement imposed by this section may be used in evidence against him.

A power conferred by this section to make a requirement of a person extends if the person is a body corporate, including a body corporate that is in the course of being wound up, or was a body corporate, being a body corporate that has been dissolved, to making that requirement of any person who is or has been an officer of the body corporate.

If a requirement to produce books relating to the affairs of a corporation or provide an explanation or make a statement which is imposed by virtue of this section is not complied with, the corporation or other person on whom the requirement was imposed shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 or to imprisonment for a term not exceeding 6 months or to both.

Where a person is charged with an offence under subsection (6) in respect of a requirement to produce any books relating to the affairs of a corporation it shall be a defence to prove that they were not in his possession or under his control or that it was not reasonably practicable for him to comply with the requirement.

A person, who in purported compliance with a requirement imposed by the section to provide an explanation or statement which he knows to be false or misleading in a material particular or recklessly provides or makes an explanation or statement which is false or misleading in a material particular, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 or to imprisonment for a term not exceeding 2 years or to both.Power of Magistrate to issue warrant to seize books8B.—

If a Magistrate is satisfied, on information on oath or affirmation laid by an authorised person, that there are reasonable grounds for suspecting that there are on any premises any books of which production has been required by virtue of section 8A and which have not been produced in compliance with that requirement, the Magistrate may issue a warrant authorising any police officer, together with any other persons named in the warrant, to enter the premises specified in the information (using such force as is reasonably necessary for the purpose) and to search the premises and take possession of any books appearing to be such books or papers as are referred to in this subsection, or to take, in relation to any books so appearing, any other steps which may appear necessary for preserving them and preventing interference with them and to deliver any books, possession of which is so taken, to an authorised person.

Every warrant issued under this section shall continue in force until the end of the period of one month after the date on which it was issued.

Where under this section a person takes possession of, or secures against interference, any books, and a person has a lien on the books, the taking of possession of the books or the securing of the books against interference does not prejudice the lien.

Where, under this section, a person takes possession of, or secures against interference, any books, that person or any authorised person to whose possession the books were delivered —

may make copies of, or take extracts from, the books;

may require any person who was party to the compilation of the books to make a statement providing any explanation that that person is able to provide as to any matter relating to the compilation of the books or as to any matter to which the books relate;

may retain possession of the books for such period as is necessary to enable the books to be inspected, and copies of, or extracts from, the books to be made or taken, by or on behalf of the Minister; and

during that period shall permit a person who would be entitled to inspect any one or more of those books if they were not in the possession of the first-mentioned person to inspect at all reasonable times such of those books as that person would be so entitled to inspect.

A person who obstructs the exercise of a right of entry or search conferred by virtue of a warrant issued under this section, or who obstructs the exercise of a right so conferred to take possession of any books, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 or to imprisonment for a term not exceeding 6 months or to both.

The powers conferred by this section are in addition to, and not in derogation of, any other power conferred by law.Copies or extracts of books to be admitted in evidence8C.—

Subject to this section, in any legal proceedings, whether proceedings under this Act or otherwise, a copy of or extract from a book relating to affairs of a corporation is admissible in evidence as if it were the original book or the relevant part of the original book.

A copy of or extract from a book is not admissible in evidence under subsection (1) unless it is proved that the copy or extract is a true copy of the book or of the relevant part of the book.

For the purposes of subsection (2), evidence that a copy of or extract from a book is a true copy of the book or of a part of the book may be given by a person who has compared the copy or extract with the book or the relevant part of the book and may be given either orally or by an affidavit sworn, or by a declaration made, by a person authorised to take affidavits or statutory declarations.Destruction, mutilation, etc. of company documents8D.—

An officer of a corporation to which section 8A(1) applies, who destroys, mutilates or falsifies, or is privy to the destruction, mutilation or falsification of a document affecting or relating to the property or affairs of the corporation, or makes or is privy to the making of a false entry in such a document, shall, unless he proves that he had no intention to conceal the affairs of the corporation or to defeat the law, be guilty of an offence.

A person to whom subsection (1) applies who fraudulently either parts with, alters or makes an omission in any such document, or who is privy to fraudulent parting with, fraudulent altering or fraudulent making of an omission in, any such document, shall be guilty of an offence.

A person guilty of an offence under this section shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both.

In this section, “officer of a corporation” includes a person who —

was at any time an officer of the corporation; or

has, or had, a financial or other interest in the affairs of the corporation.Saving for advocates and solicitors8E. Nothing in sections 8A and 8B shall compel the production by an advocate and solicitor of a document containing a privileged communication made by or to him in that capacity or authorise the taking of possession of any such document which is in his possession but if the advocate and solicitor refuses to produce the document he shall nevertheless be obliged to give the name and address (if he knows them) of the person to whom or by or on behalf of whom the communication was made.Investigation of certain matters8F. Without prejudice to the powers conferred upon the Minister under section 8A, where the Minister has reason to suspect that a person has committed an offence under this Act, he may make such investigation as he thinks expedient for the due administration of this Act.Savings for banks, insurance companies and certain financial institutions8G. Nothing in section 8A shall authorise the Minister to call for the production of books of a banking corporation or of any company carrying on insurance business or of any financial institution that is subject to control by the Monetary Authority of Singapore under sections 24B and 24C of the Monetary Authority of Singapore Act (Cap. 195) and nothing in section 8F shall authorise the Minister to conduct an investigation into any such corporation, company or financial institution.Security of information8H.—

No information or document relating to the affairs of a corporation which has been obtained under section 8A or 8B shall, without the previous consent in writing of that corporation, be published or disclosed, except to the Minister, the Registrar of Companies and their officers or to an inspector appointed under Part IX, unless the publication or disclosure is required —

with a view to the institution of or otherwise for the purposes of, any criminal proceedings pursuant to, or arising out of this Act or any criminal proceedings for an offence entailing misconduct in connection with the management of the corporation’s affairs or misapplication or wrongful retention of its property;

for the purpose of complying with any requirement or exercising any power imposed or conferred by this Act in connection with reports made by inspectors appointed under Part IX;

with a view to the institution by the Minister of proceedings for the winding up of companies under this Act of the corporation; or

for the purpose of proceedings under section 8A or 8B.

A person who publishes or discloses any information or document in contravention of this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both.”.

The Companies Act is amended by inserting, immediately after section 12, the following sections:“Electronic filing service12A.—

Where the Registry of Companies provides a service (to be called an Electronic Filing Service), whether before or after the commencement of this Act, for the use of subscribers, whereby documents required under this Act may be filed electronically with the Registry, neither the Government nor any of its employees shall be liable for any loss or damage, suffered by any person by reason of any errors or omissions, of whatever nature or however caused, appearing in any document obtained by any person under the Electronic Filing Service if such errors or omissions are made in good faith and in the ordinary course of the discharge of the duties of these employees or have occurred or arisen as a result of any defect or breakdown in the Electronic Filing Service or in any of the equipment used for the Electronic Filing Service.Evidentiary value of copies of electronically filed documents certified by Registrar(2) A copy of or extract from any document electronically filed with the Registry of Companies under subsection (1) supplied or issued by the Registrar and certified to be a true copy or extract thereof under the hand and seal of the Registrar shall in any proceedings be admissible in evidence as of equal validity with the original document.Certificate in respect of documents filed electronically(3) The Registrar may require a certificate, in respect of any document to be filed electronically, from the party filing the document certifying to the effect that any stamp fee payable for the document has been duly paid and that he has witnessed the signing and execution of the document or that the document has been duly signed and executed by the person concerned and that such signing or execution has been duly witnessed by a notary public or a solicitor or approved company auditor or a person with such other qualifications as may be prescribed for the purposes of this section. The Registrar may require the production of any document that has been signed and executed under this subsection.Rectification of register12B.—

Where it appears to the Court, as a result of evidence adduced before it by an applicant company, that any particular recorded in a register is erroneous or defective, the Court may, by order, direct the Registrar to rectify the register on such terms and conditions as seem to the Court just and expedient, as are specified in the order and the Registrar shall, upon receipt of the order rectify the register accordingly.

An order of the Court made under subsection (1) shall require that a fresh document, showing the rectification, shall be filed by the applicant company with the Registrar together with a copy of the Court order, a copy of the court application and the affidavits in support thereof.”.

Section 27(2) of the Companies Act is amended by inserting, immediately after the figures “28,” in the second line, the words “other than subsection (4) thereof,”.

Section 41 of the Companies Act is amended —

by inserting a marginal note against subsection (3) as follows:“Form of Contract.”;

by deleting the word “company” wherever it appears in subsections (3) to (7) and substituting in each case the word “corporation”; and

by inserting, immediately after subsection (7), the following subsections:“Authority of agent of a corporation need not be under seal, unless seal required by law of foreign state(8) The fact that a power of attorney or document of authorisation given to or in favour of the donee of the power or agent of a corporation is not under seal shall not, if such power of attorney or document of authorisation is valid as a power of attorney or document of authorisation in accordance with the laws of the country under which such corporation is incorporated, affect for any purpose intended to be effected in Singapore the validity or effect of any instrument under seal executed on behalf of that corporation by such donee of the power or agent, which shall for all such purposes whatsoever be as valid as if such authority had been under seal.Retrospective application(9) Subsection (8) shall also apply to every instrument under seal executed before the commencement of the Companies (Amendment) Act 1986 on behalf of any corporation by a donee of a power or an agent of that corporation whose authority was not under seal.”.

Section 44 of the Companies Act is amended —

by deleting the words “or proposed corporation” in the second and third lines of subsection (1); and

by deleting subsection (6) and substituting the following subsection:“(6) Nothing in this section applies to a prescribed corporation and nothing in this Act requires a prospectus to be issued in connection with —

an invitation issued by a prescribed corporation to the public to subscribe for or purchase debentures of a prescribed corporation;

an offer made by a prescribed corporation to the public of debentures of the prescribed corporation; or

any invitation to lend money to or deposit money with a prescribed corporation.”.

Section 47 of the principal Act is amended —

by deleting the word “corporation” wherever it appears in subsection (1) and substituting in each case the word “company”; and

by deleting subsections (2) and (3) and substituting the following subsection:“(2) Where subsection (1) applies to any offer or invitation with respect to shares or debentures of a company, an abridged prospectus shall be registered containing the particulars set out in Part V of the Fifth Schedule.”; and

by inserting, immediately after subsection (4), the following subsection:“(5) Nothing in this section shall be construed as preventing a full prospectus being registered containing the particulars set out in the Fifth Schedule (other than Part V thereof) in respect of an offer or invitation referred to in subsection (1).”.

Section 50 of the Companies Act is amended —

by deleting subsection (2) and substituting the following subsection:“(2) The Registrar shall refuse to register a copy of any prospectus if —

it contains any statement or matter which, in his opinion, is misleading in the form and context in which it is included;

the copy signed by every director and by every person who is named therein as a proposed director of the corporation or by the agent authorised in writing, is not lodged with the Registrar on or before the date of its issue;

the prospectus does not appear to comply with the requirements of this Act;

there are not also lodged with the Registrar copies verified as prescribed of any consent required by section 54 to the issue of the prospectus and of all material contracts referred to in the prospectus or, in the case of such a contract not reduced in writing, a memorandum giving full particulars thereof verified as prescribed; and

it appears to him that it is not in the interest of the investing public to do so.”; and

by inserting, immediately after subsection (4), the following subsections:“(5) The Registrar shall not refuse the registration of a prospectus under subsection (2)(e) unless he first affords the person who lodged the prospectus an opportunity of being heard.

Where the Registrar decides to refuse registration under subsection (2)(e) he shall give his reasons for so deciding to the person who lodged the prospectus within 14 days of his decision.

Any person who is aggrieved by the decision of the Registrar under subsection (6) may, within 30 days of the decision of the Registrar appeal to the Minister.

The decision of the Minister under subsection (7) shall be final and shall not be called in question in any court.”.

Section 66 is amended by inserting, immediately after subsection (1), the following subsection:“(1A) For the purposes of this section, “share warrant” means a certificate, issued by a company under its common seal (if so authorised by its articles), with respect to fully paid up shares or stock of the company that states that the bearer of the warrant is entitled to the shares therein specified and which enables the shares to be transferred by delivery of the warrant.”.