Singapore Companies (Amendment) Act 2014 – Internal Matters

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Singapore Companies (Amendment) Act 2014 – Internal Matters

The Selected Key Legislative Amendments in the Singapore Companies (Amendment) Act 2014 – Companies’ Internal Matters

1. Multiple Proxies Regime

Previous Requirement

• Unless articles provide otherwise, Member can appoint up to two proxies, and proxy can only vote by poll.

• Articles usually provide for 48-hour cut off time for submission of proxy form.

Changes

• Specified intermediaries can appoint more than two proxies:

  1. custodian banks, nominee companies that are subsidiaries of banks
  2. other persons licensed to provide custodial services to investors
  3. CPF Board

• Allow proxy to also vote on a show of hands

• Companies may provide for a 72-hour cut off time for submission of proxy form

Note: 

• Transitional provision drafted in the Companies (Amendment) Act 2014 to enable companies whose constitution indicates a 48 hour cut-off time for the submission of proxy forms to automatically rely on the longer 72 hour cut-off time, has not been brought into force.

• Existing companies whose constitution indicates a 48 hour cut-off time for the submission of proxy forms, will have to amend their constitutions to extend the cut-off time for submission of proxy forms to 72 hours, if necessary.

2. Facilitating the use of electronic transmission of documents

Previous Requirement

Company can transmit document and notices by electronic means subject to certain conditions in the Act (e.g. must be sent to current address; company and member must have agreed in writing to website publication).

Changes

• Allow companies to send notices and documents by means of electronic transmission in accordance with its constitution with express, implied or deemed consent.

• Implied consent approach – constitution provides for and specifies manner of electronic transmission, and members do not have the right to elect to receive physical copies.

• Deemed consent approach – constitution provides for electronic transmission, members are given an opportunity to choose mode of transmission; member who fails to elect will be deemed to have consented to electronic transmission.

• Safeguards imposed in regulations:

(i) For deemed consent approach, company must notify members of the option to ask for physical copies, and the member must be allowed to change his mind at any time.

(ii) If company chooses to make use of website publication, company must separately notify members of the presence of the document on the website and how the document may be accessed.

(iii) Notices/documents in relation to takeovers and rights issues are excluded and must be sent to members in physical copy.

• New provisions are in addition to existing regime in s387A and 387B.

ACRA has announced a 2-phase implementation approach to the legislative amendments to Singapore Companies Act, where about 40% of the over 200 legislative amendments will take effect in the first phase on 1 July 2015, while the second phase encompassing the rest of the legislative amendments is expected to take effect in the first quarter of 2016.

For more information on the Key Legislative Amendments of Phase 1 Implementation of the Companies (Amendment) Act 2014, please click here.

For more information on the Key Legislative Amendments of Phase 2 Implementation of the Companies (Amendment) Act 2014, please click here.

For Frequently Asked Questions (FAQs) to the Implementation of the Companies (Amendment) Act 2014, please click here.

For more information, please refer to ACRA at www.acra.gov.sg.

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