Corporate and Accounting Laws (Amendment) Bill

Order for Second Reading read.

12.32 pm

The Second Minister for Finance (Ms Indranee Rajah): Mr Speaker, I move, "That the Bill be now read a Second time."

The Corporate and Accounting Laws (Amendment) Bill has five objectives: first, to tighten rules against the misuse of companies for unlawful purposes; second, to safeguard shareholders' interests; third, to strengthen the regulatory framework for companies; fourth, to reduce regulatory burden for companies; and fifth, to enhance the regulatory regime for public accountants.

The amendments proposed in the Bill arose from the Accounting and Corporate Regulatory Authority's (ACRA's) regular review of its regulatory functions to foster a trusted and vibrant business environment. The Bill’s key amendments relate to the following Acts: the Companies Act 1967; the Limited Liability Partnerships Act 2005 (LLP Act 2005); and the Accountants Act 2004.

Let me now highlight the key amendments. The first set of amendments strengthen safeguards against the misuse of companies for unlawful purposes. Under the Companies Act 1967, the Registrar of Companies may refuse registration of a company if it is likely to be used for an unlawful purpose or for purposes prejudicial to public peace, welfare or good order in Singapore; or if its registration contravenes national security or interests. I will refer to these conditions as "grounds for refusal" for short.

However, the law currently does not explicitly require the courts or the Registrar to deny applications for restoration of struck-off companies, foreign companies or limited liability partnerships based on the grounds for refusal. While struck-off entities with the aforementioned risks are typically not restored, clauses 84, 86, 93, 117 and 119 of the Bill now expressly specify grounds for such refusal in the Companies Act 1967 and LLP Act 2005 for avoidance of doubt. This aligns with the existing criteria for refusing company registrations under the Companies Act 1967, and for winding up a company under the Insolvency, Restructuring and Dissolution Act 2018.

The second set of key amendments are aimed at safeguarding shareholders' interests. Currently, a company may purchase its own shares through a selective off-market purchase, conducted outside of a securities exchange or not under an equal access scheme. This requires approval by a special resolution, with at least 75% of voting rights in favour, excluding the votes of the shareholders whose shares are being acquired. However, in situations where a company has different classes of shares, this process may not sufficiently account for the interests of shareholders in the affected class who are not part of the selective off-market purchase.

To better safeguard shareholders' interests, clause 50 of the Bill introduces a two-tier approval process for selective off-market purchases.

Tier 1 which is an existing provision in section 76D of the Companies Act 1967, requires the approval by all shareholders, regardless of class of shares, excluding the shareholders whose shares are being acquired.

Tier 2, which is newly introduced under this Bill, requires the consent by the relevant shareholders within the affected class of shares, but excluding the shareholders whose shares are being acquired. This allows for shareholders within the affected class of shares to have a larger say in approving the selective off-market purchase. Both tiers require a 75% approval threshold. To simplify implementation for the new Tier 2 approval, companies can obtain written consent from affected shareholders, and do not need to convene a separate class meeting.

The third set of amendments strengthen the regulatory framework for companies. Section 157 of the Companies Act 1967 requires a director to manage the company and act in its best interests, honestly and with reasonable diligence. A breach of the provision is an offence, and currently the penalty is a fine not exceeding $5,000 or imprisonment for up to 12 months.

However, when compared to penalties for equivalent offences in other leading common law jurisdictions, we found that there was scope for an upward revision of the penalties. Clause 58 of the Bill increases the maximum fine to $20,000, or imprisonment for a term not exceeding 12 months, or both. This provides stronger penalties to deter potential offenders.

The fourth set of key amendments reduce the regulatory burden on companies. Since inception of the Companies Act in 1967, a company's registered office must be open to the public for at least three hours each business day. This was primarily intended to facilitate access to company records by any persons entitled to inspect them.

To reduce the regulatory burden on companies while maintaining the rights of those who need access to company records in the company's registered office, clauses 52, 89, 90, 99 of the Bill abolish the minimum opening hours requirement. Instead, the Bill provides that persons entitled to inspect any company record must give the company reasonable notice of their intent to do so. Upon being given such notice, companies must then make such records available for inspection for at least two hours during each of the relevant business days. This will give companies more flexibility to determine the operating hours of their registered offices.

For avoidance of doubt, the proposed amendment will not affect service of documents at the company's registered office. The Companies Act 1967 allows a document to be served on a company by leaving it at or sending it by registered post to the registered office of the company, without requiring the registered office to be physically open.

The final set of amendments are intended to enhance the regulatory regime of public accountants. Currently, audit reports are usually signed off by accounting entities, rather than the specific individual public accountant who performed the audit. The identity of the public accountant primarily responsible for the audit engagement is not disclosed in the audit report itself, though this information is available in the register of auditors on ACRA's Bizfile.

To promote greater personal accountability for public accountants and transparency in the auditing profession, clause 32 of the Bill inserts a new section 59A to the Accountants Act 2004 to require the public accountant who is primarily responsible for an audit engagement to be identified in the audit report itself.

The other provisions in the Bill make technical, related and consequential amendments, including to the ACRA Act 2004, the Limited Partnerships Act 2008, the Variable Capital Companies Act 2018, Exchanges (Demutualisation and Merger) Act 1999, the Insolvency, Restructuring and Dissolution Act 2018 and the Securities and Futures Act 2001.

Mr Speaker, in conclusion, the proposed amendments in this Bill are part of our ongoing efforts to enhance our corporate governance and regulatory framework, reinforcing our position as an efficient and trusted business hub.

Question proposed.

Mr Speaker: Mr Edward Chia.

12.40 pm

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Mr Speaker, Sir, I would first like to declare that I am a business owner and hold directorships in enterprises registered with ACRA.

I rise in support of the Corporate and Accounting Laws (Amendment) Bill 2025. This Bill represents another important step to keep Singapore’s corporate and accounting frameworks progressive, trusted and competitive. It modernises key provisions in the Companies Act and Accountants Act. It strengthens governance, enhances transparency and ensures our laws continue to support enterprise growth and innovation in a fast-changing business environment.

Mr Speaker, first, I commend the Ministry for the many pro-business and practical reforms in this Bill. The Bill removes outdated rules, such as the statement in lieu of prospectus and the old requirement for offices to stay open three hours a day for public inspection. Replacing that with a flexible two-hour access window, subject to reasonable notice, is a sensible update that reflects today's digital practices.

I also welcome the potential exemption from full Singapore Financial Reporting Standards for smaller entities. If applied with clear criteria, this can make accounting simpler and more cost-effective for small and medium enterprises (SMEs), while preserving transparency.

Taken together, these are forward-looking moves that make compliance easier, reduce friction for businesses and strengthen Singapore’s standing as a trusted and efficient business hub.

However, Mr Speaker, I would like to highlight several practical concerns from the perspective of SMEs, which make up the vast majority of registered companies in Singapore.

First, the Bill formalises public access to a private company's electronic Register of Members. It removes the right to inspect physical documents but retains the right for anyone to obtain an electronic copy or extract from ACRA. Some shareholder details, such as names, shareholdings and addresses, are already available in the ACRA Biz Profile.

However, this change expands both the mode and depth of access. This electronic register contains more detailed information, including share transfer dates, ownership history, and in some cases, residential addresses where no business address is listed. By allowing anyone to easily obtain these details through ACRA, the Bill could increase the exposure of personal and commercial data. For small family firms and investment holding companies, this raises legitimate concerns about privacy, confidentiality and data protection.

Mr Speaker, I acknowledge that the Bill remains consistent with the Personal Data Protection Act (PDPA). Disclosures required under the Companies Act are exempt from the PDPA’s consent rules.

However, while this legal alignment is clear, the policy implications merit attention. As the electronic register becomes more accessible, ACRA should continue to apply data protection principles in practice, such as masking residential addresses, limit access to essential information and ensuring robust safeguards against misuse or data scraping. A privacy-by-design approach will preserve transparency while protecting the trust and personal data of business owners.

I therefore urge the Ministry to work with ACRA to implement appropriate redaction and access safeguards. For instance, masking residential addresses, or limiting sensitive information to request-based access rather than automatic downloads.

Second, the Bill introduces stricter report and notification requirements, coupled with higher penalties. Companies must now report disqualifications or changes in key appointments promptly and accurately. Fines for administrative oversights, such as failing to update a registered office address, can reach up to $5,000. These measures strengthen accountability and corporate discipline. However, smaller firms without compliance staff may find it challenging to keep pace with the new requirements. A single delay, even if unintentional, could result in penalties that feel disproportionate to their scale or intent.

Third, while the Bill empowers the Minister to exempt certain classes of companies from full accounting standards, the criteria for exemption have yet been defined. Without clearer thresholds or guidance, SMEs may be unsure whether they qualify or how they apply for such exemptions. This uncertainty could lead to confusion and inconsistent compliance when the changes come into force.

Mr Speaker, Sir, allow me to offer three suggestions to support smooth implementation and uphold our pro-business intent.

First, for the members' Register, apply proportionate safeguards, such as masking residential addresses or limiting sensitive data to request-based access. This preserves transparency while reducing the risk of misuse. Second, as stricter penalties or shorter reporting timelines take effect, consider a six- to 12-month grace period for first-time or unintentional breaches. ACRA could also publish clear, plain English compliance guides, with templates, calendars and examples of "reasonable notice" for record inspections. Third, if the intent is to ease compliance for smaller firms, publish the qualifying thresholds, such as revenue size or asset size, well in advance. Complement this with outreach through SME Centres and professional bodies, so businesses can prepare their systems ahead of time.

In closing, Mr Speaker, this Bill strengthens Singapore's reputation as a place where governance is strong, business is trusted, and laws are modern and fair. It strikes a balance between transparency and privacy, between accountability and practicality. As we refine our laws, it is worthy to note that smaller enterprises form the backbone of our economy. When rules are clear, proportionate and supported by guidance, they do more than ensure compliance. They build confidence, innovation and resilience. With thoughtful implementation and continued dialogue with our business community, this Bill can both enhance fairness and empower enterprises.

Mr Speaker: Mr Lee Hong Chuang.

12.47 pm

Mr Lee Hong Chuang (Jurong East-Bukit Batok): Mr Speaker, I rise today to speak in support of the Corporate and Accounting Laws (Amendment) Bill 2025, in particular, what it means for our SMEs, which are the true backbone of Singapore's economy.

SMEs are not just statistics. They make up over 99% of all businesses, contribute nearly half of our gross domestic product (GDP) and employ about 70% of our workforce. They are our innovators, job creators and community builders. When SMEs do well, Singapore does well. But when they struggle, the ripple effects are felt across our economy and society.

This Bill seeks to strengthen corporate governance, enhance financial transparency and align our frameworks with international standards, including the Financial Action Task Force's (FATF's) recommendations on ownership disclosure and anti-laundering measures. These are important goals. Accountability matters. Transparency matters. But even as we pursue higher standards, we must ensure that our SMEs, which form the heartbeat of our business ecosystem, are able to comply effectively and affordably.

Many SMEs in Singapore are lean operations often family-run, entrepreneur-driven, with small teams juggling multiple roles. While stronger reporting and record-keeping can improve transparency, they can also raise compliance costs, especially for smaller firms with limited resources. If compliance becomes too complex or expensive, we risk discouraging innovation and entrepreneurship. Funds that could go into hiring, product development or market expansion may, instead, be channelled into paperwork, audits and consultancy fees. We must, therefore, ensure that transparency and efficiency progress hand-in-hand, especially for SMEs.

Good governance enhances credibility and access to capital. However, if SMEs find the new requirements difficult to fulfil, they may appear riskier to lenders or investors, ironically, reducing their access to financing or grants. In an economy where many SMEs depend on trade finance, venture capital and Government grants, the risk is real to them.

That said, Mr Speaker, this Bill also presents great opportunities for SMEs. Enhanced corporate governance and ownership transparency will build investor confidence, attract long-term capital and reinforce Singapore's standing as a trusted and competitive global business hub. Done right, this Bill will not only uphold our clean and credible reputation, it will also empower SMEs to grow on a stronger and more sustainable foundation. The key lies in implementation, ensuring proportionality, support and flexibility.

Recently, I had the privilege of engaging in a dialogue with a group of predominantly Chinese-speaking SME owners at the Society of Modern Management Singapore. They shared valuable insights about their experiences and challenges in doing business locally and they offered many constructive views. They expressed confidence in the future and strong support for our national policies. At the same time, they thanked the Government for its long-lasting commitment to supporting SMEs through various policies and initiatives. This consistent policy support has given SMEs a strong foundation to navigate in this increasingly complex global environment. Thus, allow me to offer five practical recommendations to make the implementation more SME-friendly.

One, tiered compliance requirements. Adjust requirements based on company size, revenue or staff strength. Larger firms can meet full reporting standards, while micro and small enterprises should simplify templates that maintain accountability without excessive cost.

Two, digital enablement and simplified filing. Enhance ACRA's Bizfile+ platform with easy-to-use templates and automation tools. Where possible, integrate SMEs' accounting software directly with ACRA systems to reduce manual data entry and errors.

Three, capacity building and advisory support. Provide training, webinars and advisory hotlines to help SMEs comply efficiently. Equip local accounting firms and trade associations to mentor and guide smaller businesses.

Four, financial assistance measures. Consider targeted grants or subsidies to offset initial compliance costs, especially for digital reporting or first-time audits.

Five, phased implementation. Allow a reasonable adjustment period for SMEs to familiarise themselves with the new ownership disclosure and filing requirements, ensuring smooth and confident adaptation. Mr Speaker, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, SMEs are important backbone of Singapore's economy. They make up over 99% of all businesses, contribute nearly half of our GDP and employ about 70% of our workers. The growth and vitality of SMEs directly affect the robustness and resilience of our economy. It can be said that when SMEs do well, Singapore does well.

Recently, I had the privilege of engaging in a dialogue with a group of predominantly Chinese speaking SMEs owner at The Society of Modern Management Singapore. They shared valuable insights about their experiences and challenges in doing business locally and offered many constructive views. This exchange made me feel deeply that the entrepreneurship, flexible thinking and unwavering determination of our entrepreneurs are important driving forces behind Singapore’s continuous economic transformation and growth. They expressed confidence in the future and strong support for our national policies.

At the same time, they also thanked the Government's long-standing commitment to support SMEs. Through various initiatives, such as the Enterprise Transformation Programme, the Government has actively promoted digitalisation, innovation and internationalisation, providing valuable resources and direction for businesses.

The Corporate and Accounting Laws (Amendment) Bill 2025 further demonstrates the Government's continued commitment to improving the business environment and enhancing governance standards. These measures will not only enhance Singapore's international reputation, but also consolidate our position as a business hub that is trustworthy, stable and reliable.

Of course, we must also be mindful of the manpower and cost pressures that SMEs may face when implementing the new regulations. I believe the Government will adopt a pragmatic and inclusive approach to ensure that the new measures enhance transparency whilst not imposing excessive burdens on businesses.

Through streamlining processes, strengthening training, providing financial support and phased implementation, we can help businesses transition smoothly and achieve more comprehensive results from the reforms.

(In English): Mr Speaker, the goal must be balance. Corporate transparency is essential to preserve trust in our markets. Yet, we must also protect the agility and entrepreneurial spirit that define Singapore's SMEs. If we calibrate this Bill thoughtfully, we can achieve both robust governance and vibrant enterprise. Let us pass legislation through strengthened accountability without stifling ambition and empower our SMEs to grow, innovate and continue contributing to Singapore's prosperity for generations to come. Mr Speaker, I support the Bill with these considerations in mind.

Mr Speaker: Minister Indranee.

12.57 pm

Ms Indranee Rajah: Mr Speaker, I would like to thank Mr Edward Chia and Mr Lee Hong Chuang for their comments and support for the Bill. They have spoken on two main themes relating to compliance costs for companies and the importance of data protection, and I will address these in turn.

Let me start by addressing Mr Chia's and Mr Lee's comments on the importance of striking a balance between strengthening corporate governance while ensuring compliance costs do not unduly stifle business growth.

The Ministry of Finance and ACRA regularly review the corporate regulatory framework to reduce compliance costs for companies. In my opening speech, I mentioned that the Bill removes the requirement for a company's registered office to be open for at least three hours every business day. Let me explain how this can help reduce compliance costs for SMEs.

By removing the requirement, we are giving companies more flexibility in managing their operations and reduce unnecessary staffing costs. For example, some companies can cease engaging corporate secretarial services, if they were engaged solely to meet the minimum operating hours requirements, even when their business operations do not actually require the registered office to be open.

Most of the amendments relating to strengthening the regulatory framework for companies are existing obligations under the Companies Act. Companies are already required to file their annual returns and maintain proper accounting records.

Mr Edward Chia mentioned that the Bill introduces stricter reporting and notification requirements. The "new" reporting requirement Mr Chia mentioned relates to the amended section 173A of the Companies Act. Currently, section 173A requires companies to report changes in position-holder details within 14 days. The amendment clarifies that this requirement includes reporting when a director has been disqualified from acting as a director. However, I emphasise that companies only need to report a director's disqualification after becoming aware of the director's disqualification and companies have 14 days to do so.

Both Mr Edward Chia and Mr Lee Hong Chuang asked if financial reporting and auditing requirements could be simplified for SMEs. The current regulatory framework already provides for this. For example, small companies can prepare their financial statements using a simplified financial reporting framework. The Companies Act also exempts companies from audit requirements if their revenue, assets and/or employees are below certain thresholds. ACRA will continue to review these compliance requirements to see if more companies can benefit from these simplified frameworks or exemptions. ACRA is also studying how to make digital filing for financial statements simpler.

On the suggestion by Mr Edward Chia and Mr Lee Hong Chuang for a grace period for companies and individuals to comply with new requirements in this Bill, most of the provisions of the Bill are only targeted to be commenced after six months. This will give companies and individuals time to prepare. In addition, when ACRA enforces these requirements, it will do so in a measured manner and ensure that any sanction is proportionate to the circumstances of the breach.

Next, let me address Mr Chia's questions on data protection. He asked whether replacing the right to inspect the Registrar's physical documents with electronic access would change the scope of personal and company data exposed to the public.

To clarify, the amendments do not expand the scope of access to personal or company data. For example, members of the public can already inspect a private company's electronic register of members upon payment of the prescribed fees under section 12(2)(d) of the Companies Act 1967. The amendments simply update the mode of access by replacing physical inspection with electronic access to the same information. This removes an obsolete requirement without prejudicing or expanding rights.

In relation to privacy and data protection concerns raised by Mr Chia, ACRA is mindful of the need to balance corporate transparency with personal data protection. For example, ACRA implemented the filing of a contact address last year to enhance personal data protection. As the Registrar will make public the contact address and not the residential address, I encourage shareholders and position holders to file a non-residential contact address to better protect their personal data. In other words, ACRA needs to know the residential address, that is for ACRA's purposes. But sometimes when you need to have personal service of court documents, for example, you can put a contact address which the documents can be served, and that is what is made publicly available.

In conclusion, this Bill demonstrates our commitment to continually strengthen the robustness of our corporate regulatory framework and ensure Singapore remains a good place to do business. Mr Speaker, I seek to move.

1.02 pm

Mr Speaker: Mr Chia, Mr Lee, any clarifications for Minister? No?

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Ms Indranee Rajah].

Bill considered in Committee; reported without amendment; read a Third time and passed.