[et_pb_section fb_built=”1″ fullwidth=”on” _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_fullwidth_header title=”What ACRA Won’t Warn You About: 8 Companies Act Myths Costing Singapore SMEs Thousands” header_scroll_down=”on” scroll_down_icon_color=”#d6e4f0″ background_overlay_color=”rgba(0,0,0,0.55)” content_max_width=”860px” _builder_version=”4.27.6″ _module_preset=”default” title_font=”Montserrat|700|||||||” title_font_size=”54px” title_line_height=”1.15em” background_color=”RGBA(255,255,255,0)” background_image=”https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-content\/uploads\/2025\/10\/Company-Act-Misconception-Header-Lionsworld.jpg” parallax=”on” custom_margin=”||||false|false” custom_padding=”100px||70px||false|false” hover_enabled=”0″ title_text_shadow_style=”preset1″ global_colors_info=”{}” sticky_enabled=”0″][\/et_pb_fullwidth_header][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.27.6″ _module_preset=”default” max_width=”860px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.27.6″ _module_preset=”default” text_text_color=”#000000″ text_font_size=”18px” text_line_height=”1.75em” global_colors_info=”{}”]<\/p>\n
The Companies Act 1967 (Cap. 50)<\/strong> often intimidates SME leaders, who think it is irrelevant and best left to lawyers or corporate secretaries. However, misunderstanding the Act\u2019s requirements often leads to compliance failures.<\/p>\n These failures cost SMEs money and damage their reputations. This article examines the most common SME misconceptions about the Companies Act and clarifies the facts all company directors must know.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row column_structure=”1_3,1_3,1_3″ _builder_version=”4.27.6″ _module_preset=”default” max_width=”760px” global_colors_info=”{}”][et_pb_column type=”1_3″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_number_counter title=”Max fine per share certificate violation” number=”S$1,000″ percent_sign=”off” _builder_version=”4.27.6″ _module_preset=”default” title_text_color=”#555555″ title_font_size=”14px” number_font=”|600|||||||” number_text_color=”#c0392b” number_font_size=”48px” global_colors_info=”{}”][\/et_pb_number_counter][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_number_counter title=”Max fine for missed AGM or Annual Return” number=”S$10,000″ percent_sign=”off” _builder_version=”4.27.6″ _module_preset=”default” title_text_color=”#555555″ title_font_size=”14px” number_font=”|600|||||||” number_text_color=”#c0392b” number_font_size=”48px” global_colors_info=”{}”][\/et_pb_number_counter][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_number_counter title=”Months a disqualified director is barred from all boards” number=”60″ percent_sign=”off” _builder_version=”4.27.6″ _module_preset=”default” title_text_color=”#555555″ title_font_size=”14px” number_font=”|600|||||||” number_text_color=”#c0392b” number_font_size=”48px” global_colors_info=”{}”][\/et_pb_number_counter][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.27.6″ _module_preset=”default” max_width=”860px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_heading title=”Myth 1: %22Share Certificates Aren’t Important – We Are Already Incorporated%22″ _builder_version=”4.27.6″ _module_preset=”default” title_level=”h2″ title_font=”|700|||||||” title_text_color=”#000000″ title_font_size=”28px” title_line_height=”1.1em” global_colors_info=”{}”][\/et_pb_heading][et_pb_toggle title=”Myth \u2715” closed_toggle_background_color=”#fdf2f2″ icon_color=”#922b21″ _builder_version=”4.27.6″ _module_preset=”default” title_font=”Lato|700|||||||” title_font_size=”18px” body_font_size=”18px” border_radii=”on|10px|10px|10px|10px” global_colors_info=”{}”]<\/p>\n Some believe that since shareholder details are registered with ACRA, physical share certificates are no longer necessary.<\/p>\n [\/et_pb_toggle][et_pb_text _builder_version=”4.27.6″ _module_preset=”default” text_text_color=”#000000″ text_font_size=”18px” text_line_height=”1.75em” header_4_font=”|600|||||||” header_4_text_color=”#1e8449″ header_4_font_size=”20px” header_4_line_height=”1.75em” background_color=”#f0faf4″ custom_padding=”24px|28px|24px|28px|true|true” border_radii=”on|20px|20px|20px|20px” border_width_all=”4px” border_color_all=”#1c3b28″ global_colors_info=”{}”]<\/p>\n Share certificates provide\u00a0legal proof of ownership<\/strong>\u00a0and must be issued within\u00a060 days of allotment<\/strong>\u00a0or\u00a030 days of transfer<\/strong>. Non-compliance incurs a fine of up to <\/span>S$1,000 per violation<\/b>. Beyond compliance, certificates establish shareholder rights and enable future transfers and financing.<\/span> Share certificates are legally mandatory \u2014 treating them as optional invites disputes and repeated penalties.<\/span><\/a><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.27.6″ _module_preset=”default” max_width=”860px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_heading title=”Myth 2: %22Any One Director Can Sign Resolutions%22″ _builder_version=”4.27.6″ _module_preset=”default” title_level=”h2″ title_font=”|700|||||||” title_text_color=”#000000″ title_font_size=”28px” title_line_height=”1.1em” global_colors_info=”{}”][\/et_pb_heading][et_pb_toggle title=”Myth \u2715” closed_toggle_background_color=”#fdf2f2″ icon_color=”#922b21″ _builder_version=”4.27.6″ _module_preset=”default” title_font=”Lato|700|||||||” title_font_size=”18px” body_font_size=”18px” border_radii=”on|10px|10px|10px|10px” global_colors_info=”{}”]<\/p>\n Certain directors believe that a single signature or an informal agreement can validate important matters.<\/p>\n [\/et_pb_toggle][et_pb_text _builder_version=”4.27.6″ _module_preset=”default” text_text_color=”#000000″ text_font_size=”18px” text_line_height=”1.75em” header_4_font=”|600|||||||” header_4_text_color=”#1e8449″ header_4_font_size=”20px” header_4_line_height=”1.75em” background_color=”#f0faf4″ custom_padding=”24px|28px|24px|28px|true|true” border_radii=”on|20px|20px|20px|20px” border_width_all=”4px” border_color_all=”#1c3b28″ global_colors_info=”{}”]<\/p>\n There are two types of resolutions under the Companies Act: board resolutions (for management decisions) and shareholder resolutions (for ownership matters).<\/span><\/p>\n <\/p>\n Skipping these processes invalidates decisions and leaves the company open to challenges.<\/span>[\/et_pb_text][et_pb_image src=”https:\/\/glutenfreepleasure.com\/__proxy_domain\/lionsworld.com.sg\/wp-content\/uploads\/2025\/10\/Company-Act-Myth-2.jpg” alt=”Company Act Misconception Blog Image Lionsworld” title_text=”Company Act Myth #2″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.27.6″ _module_preset=”default” max_width=”860px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_heading title=”Myth 3: %22A Corporate Secretary is Just a Paper-Pusher%22″ _builder_version=”4.27.6″ _module_preset=”default” title_level=”h2″ title_font=”|700|||||||” title_text_color=”#000000″ title_font_size=”28px” title_line_height=”1.1em” global_colors_info=”{}”][\/et_pb_heading][et_pb_toggle title=”Myth \u2715” closed_toggle_background_color=”#fdf2f2″ icon_color=”#922b21″ _builder_version=”4.27.6″ _module_preset=”default” title_font=”Lato|700|||||||” title_font_size=”18px” body_font_size=”18px” border_radii=”on|10px|10px|10px|10px” global_colors_info=”{}”]<\/p>\n SME owners view the secretary as an ordinary administrative clerk or PA.<\/span><\/p>\n [\/et_pb_toggle][et_pb_text _builder_version=”4.27.6″ _module_preset=”default” text_text_color=”#000000″ text_font_size=”18px” text_line_height=”1.75em” header_4_font=”|600|||||||” header_4_text_color=”#1e8449″ header_4_font_size=”20px” header_4_line_height=”1.75em” background_color=”#f0faf4″ custom_padding=”24px|28px|24px|28px|true|true” border_radii=”on|20px|20px|20px|20px” border_width_all=”4px” border_color_all=”#1c3b28″ global_colors_info=”{}”]<\/p>\n The Corporate Secretary is a senior officer with responsibilities concerning statutory compliance and governance, and has various duties including:<\/span><\/p>\n A compliance-oriented professional provides significant value beyond merely processing paperwork;<\/span> they are responsible for ensuring the corporation adheres to all applicable legal and regulatory requirements (s. 171)<\/span><\/a>.<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.27.6″ _module_preset=”default” max_width=”860px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_heading title=”Myth 4: %22Small Companies Do Not Need a Corporate Secretary%22″ _builder_version=”4.27.6″ _module_preset=”default” title_level=”h2″ title_font=”|700|||||||” title_text_color=”#000000″ title_font_size=”28px” title_line_height=”1.1em” global_colors_info=”{}”][\/et_pb_heading][et_pb_toggle title=”Myth \u2715” closed_toggle_background_color=”#fdf2f2″ icon_color=”#922b21″ _builder_version=”4.27.6″ _module_preset=”default” title_font=”Lato|700|||||||” title_font_size=”18px” body_font_size=”18px” border_radii=”on|10px|10px|10px|10px” global_colors_info=”{}”]<\/p>\n Some will think that this obligation is only relevant for larger entities or that any staff member can be casually appointed and can undertake this role.<\/p>\n [\/et_pb_toggle][et_pb_text _builder_version=”4.27.6″ _module_preset=”default” text_text_color=”#000000″ text_font_size=”18px” text_line_height=”1.75em” header_4_font=”|600|||||||” header_4_text_color=”#1e8449″ header_4_font_size=”20px” header_4_line_height=”1.75em” background_color=”#f0faf4″ custom_padding=”24px|28px|24px|28px|true|true” border_radii=”on|20px|20px|20px|20px” border_width_all=”4px” border_color_all=”#1c3b28″ global_colors_info=”{}”]<\/p>\n Every company must appoint a corporate secretary within six months of incorporation. A single director or\u00a0<\/span>shareholder cannot<\/em><\/span>\u00a0serve concurrently as the company secretary.<\/span><\/p>\n Private companies may appoint unqualified individuals, but selecting someone lacking regulatory expertise risks missed statutory deadlines, erroneous filings, and penalties. Public companies require professionally qualified secretaries.<\/span><\/p>\n More than a formality,<\/span> this position is a legislatively mandated requirement and is central to maintaining the company\u2019s good standing (s. 171)<\/span><\/a>.<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.27.6″ _module_preset=”default” max_width=”860px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_heading title=”Myth 5: %22We Can Skip General Meetings and Annual Returns%22″ _builder_version=”4.27.6″ _module_preset=”default” title_level=”h2″ title_font=”|700|||||||” title_text_color=”#000000″ title_font_size=”28px” title_line_height=”1.1em” global_colors_info=”{}”][\/et_pb_heading][et_pb_toggle title=”Myth \u2715” closed_toggle_background_color=”#fdf2f2″ icon_color=”#922b21″ _builder_version=”4.27.6″ _module_preset=”default” title_font=”Lato|700|||||||” title_font_size=”18px” body_font_size=”18px” border_radii=”on|10px|10px|10px|10px” global_colors_info=”{}”]<\/p>\n Dormant companies or small companies believe AGMs and annual filings are merely formalities.<\/p>\n [\/et_pb_toggle][et_pb_text _builder_version=”4.27.6″ _module_preset=”default” text_text_color=”#000000″ text_font_size=”18px” text_line_height=”1.75em” header_4_font=”|600|||||||” header_4_text_color=”#1e8449″ header_4_font_size=”20px” header_4_line_height=”1.75em” background_color=”#f0faf4″ custom_padding=”24px|28px|24px|28px|true|true” border_radii=”on|20px|20px|20px|20px” border_width_all=”4px” border_color_all=”#1c3b28″ global_colors_info=”{}”]<\/p>\n Every company must hold an\u00a0<\/span>Annual General Meeting (AGM)<\/strong>\u00a0<\/span>and file an\u00a0<\/span>Annual Return<\/strong>, unless it has formally opted out under\u00a0<\/span>the Companies Act<\/a>. To do so, shareholders must first pass a written resolution stating the company will not hold AGMs. The exception is available only if all shareholders agree. If any shareholder later requests an AGM, the directors must hold one.<\/p>\n Companies exempted from holding AGMs are still bound to prepare financial statements, circulate them to shareholders within 5 months of the end of their financial year, and file their Annual Return with ACRA.<\/p>\n Not holding AGMs (when required) or failing to file Annual Returns on time leads to penalties of S$5,000\u201310,000 for each offence. Repeated offences may also disqualify directors. Non-compliance is visible in ACRA\u2019s records and undermines credibility with banks and partners.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.27.6″ _module_preset=”default” max_width=”860px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_heading title=”Myth 6: %22Statutory Registers and Minutes Are Redundant Because ACRA Has All That Information%22″ _builder_version=”4.27.6″ _module_preset=”default” title_level=”h2″ title_font=”|700|||||||” title_text_color=”#000000″ title_font_size=”28px” title_line_height=”1.1em” global_colors_info=”{}”][\/et_pb_heading][et_pb_toggle title=”Myth \u2715” closed_toggle_background_color=”#fdf2f2″ icon_color=”#922b21″ _builder_version=”4.27.6″ _module_preset=”default” title_font=”Lato|700|||||||” title_font_size=”18px” body_font_size=”18px” border_radii=”on|10px|10px|10px|10px” global_colors_info=”{}”]<\/p>\n Initially, entrepreneurs think that once information is filed with ACRA, they have no reason to continue to maintain statutory registers or meeting minutes.<\/p>\n [\/et_pb_toggle][et_pb_text _builder_version=”4.27.6″ _module_preset=”default” text_text_color=”#000000″ text_font_size=”18px” text_line_height=”1.75em” header_4_font=”|600|||||||” header_4_text_color=”#1e8449″ header_4_font_size=”20px” header_4_line_height=”1.75em” background_color=”#f0faf4″ custom_padding=”24px|28px|24px|28px|true|true” border_radii=”on|20px|20px|20px|20px” border_width_all=”4px” border_color_all=”#1c3b28″ global_colors_info=”{}”]<\/p>\n The Companies Act (s. 173)<\/span><\/a>\u00a0requires companies\u00a0<\/span>to maintain<\/strong><\/span>\u00a0internal statutory registers<\/b>\u00a0for members, directors, secretaries, and charges at their registered office. Companies must also record and keep the minutes of board meetings and shareholders\u2019 meetings.<\/span><\/p>\n These records are critical during statutory audits, shareholder disputes, regulatory investigations, and investor due diligence processes. Deficient or incomplete statutory registers can jeopardise equity fundraising rounds, compromise M&A transaction closures, or undermine legal proceedings by creating evidentiary gaps.<\/span><\/p>\n SMEs frequently encounter such compliance breaches, yet can entirely prevent them by engaging a diligent corporate secretary<\/a> who maintains rigorous record-keeping protocols.<\/span><\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/glutenfreepleasure.com\/__proxy_domain\/lionsworld.com.sg\/wp-content\/uploads\/2025\/10\/Company-Act-Myth-3.jpg” alt=”Company Act Misconception Blog Image 02 Lionsworld” title_text=”Company Act Myth #3″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.27.6″ _module_preset=”default” max_width=”860px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_heading title=”Myth 7: %22Non-Compliance Is Not an Issue For Small Companies%22″ _builder_version=”4.27.6″ _module_preset=”default” title_level=”h2″ title_font=”|700|||||||” title_text_color=”#000000″ title_font_size=”28px” title_line_height=”1.1em” global_colors_info=”{}”][\/et_pb_heading][et_pb_toggle title=”Myth \u2715” closed_toggle_background_color=”#fdf2f2″ icon_color=”#922b21″ _builder_version=”4.27.6″ _module_preset=”default” title_font=”Lato|700|||||||” title_font_size=”18px” body_font_size=”18px” border_radii=”on|10px|10px|10px|10px” global_colors_info=”{}”]<\/p>\n Some directors think that small companies or SMEs are ignored by regulators, or that there are few consequences for doing nothing.<\/p>\n [\/et_pb_toggle][et_pb_text _builder_version=”4.27.6″ _module_preset=”default” text_text_color=”#000000″ text_font_size=”18px” text_line_height=”1.75em” header_4_font=”|600|||||||” header_4_text_color=”#1e8449″ header_4_font_size=”20px” header_4_line_height=”1.75em” background_color=”#f0faf4″ custom_padding=”24px|28px|24px|28px|true|true” border_radii=”on|20px|20px|20px|20px” border_width_all=”4px” border_color_all=”#1c3b28″ global_colors_info=”{}”]<\/p>\n ACRA holds all companies to the same compliance standards, no matter their size. Infractions such as neglecting to file returns, skipping AGMs, or failing to maintain statutory registers can result in fines ranging from several hundred to several thousand dollars.<\/span>\u00a0Persistent non-compliance may even lead to disqualification from directorship (s. 155).<\/span><\/a><\/p>\n Beyond penalties, non-compliance damages reputation \u2014 investors and partners review ACRA records before engaging. Poor compliance history signals weak governance and deters business opportunities.<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.27.6″ _module_preset=”default” max_width=”860px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_heading title=”Myth 8: %22Balance Sheet and Profit & Loss Statement Are Sufficient for Annual Returns Filing%22″ _builder_version=”4.27.6″ _module_preset=”default” title_level=”h2″ title_font=”|700|||||||” title_text_color=”#000000″ title_font_size=”28px” title_line_height=”1.1em” global_colors_info=”{}”][\/et_pb_heading][et_pb_toggle title=”Myth \u2715” closed_toggle_background_color=”#fdf2f2″ icon_color=”#922b21″ _builder_version=”4.27.6″ _module_preset=”default” title_font=”Lato|700|||||||” title_font_size=”18px” body_font_size=”18px” border_radii=”on|10px|10px|10px|10px” global_colors_info=”{}”]<\/p>\n Some entrepreneurs believe that simply filing their balance sheet and profit and loss statement is sufficient to comply with ACRA\u2019s filing requirements.<\/p>\n [\/et_pb_toggle][et_pb_text _builder_version=”4.27.6″ _module_preset=”default” text_text_color=”#000000″ text_font_size=”18px” text_line_height=”1.75em” header_4_font=”|600|||||||” header_4_text_color=”#1e8449″ header_4_font_size=”20px” header_4_line_height=”1.75em” background_color=”#f0faf4″ custom_padding=”24px|28px|24px|28px|true|true” border_radii=”on|20px|20px|20px|20px” border_width_all=”4px” border_color_all=”#1c3b28″ global_colors_info=”{}”]<\/p>\n Merely filing balance sheets and profit and loss statements is entirely inadequate under the Companies Act 1967. Sections 201 and 203 of the Act require full accounts that comply with the Singapore Financial Reporting Standards (SFRS) and include directors’ reports, notes to the accounts, and auditors’ reports, where applicable.<\/p>\n Your financial return should present a true and fair view of the fiscal position of the corporation, the transactions it has made, and the matters it deals with. Directors should formally approve and sign these statements before circulating them to shareholders or lodging them with ACRA.<\/p>\n Annual Return Filing: As part of the Annual Returns process, you must file the full accounts with ACRA. Simply filing profit and loss statements, balance sheets, or unaudited draft accounts will not comply with the statutory requirements. ACRA may reject such returns, and authorities may impose fines.<\/p>\n Statutory compliance ensures transparency and goes beyond merely satisfying requirements. It protects directors against liability for wrong or misleading reports under<\/span> section 401 of the Companies Act<\/span><\/a>.<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.4″ _module_preset=”default” width=”99.8%” global_colors_info=”{}”][et_pb_row column_structure=”2_3,1_3″ use_custom_gutter=”on” gutter_width=”2″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”2_3″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_heading title=”Other Common Misconceptions Worth Mentioning” _builder_version=”4.27.6″ _module_preset=”default” title_level=”h2″ title_font=”|700|||||||” title_text_color=”#000000″ title_font_size=”28px” global_colors_info=”{}”][\/et_pb_heading][et_pb_blurb title=”Directors Have Very Little Responsibility” use_icon=”on” _builder_version=”4.27.6″ _module_preset=”default” header_font=”|700|||||||” header_text_color=”#1a3c6e” header_font_size=”22px” header_line_height=”1.8em” body_text_align=”justify” body_text_color=”#000000″ body_font_size=”16px” body_line_height=”1.8em” background_color=”#f7f9fc” custom_padding=”32px|24px|32px|24px|true|true” border_radii=”on|20px|20px|20px|20px” border_width_all=”2px” border_color_all=”#1a3c6e” global_colors_info=”{}”]<\/p>\n Some directors ignore their fiduciary responsibilities under the Act,<\/span>\u00a0<\/span>which include acting in the best interests of the company<\/span><\/a>, avoiding conflicts of interest, and exercising reasonable diligence. Breaching any fiduciary duties can attract personal liability.<\/span><\/p>\n [\/et_pb_blurb][et_pb_blurb title=”Nominee Directors Have No Real Risk” use_icon=”on” _builder_version=”4.27.6″ _module_preset=”default” header_font=”|700|||||||” header_text_color=”#1a3c6e” header_font_size=”22px” header_line_height=”1.8em” body_text_align=”justify” body_text_color=”#000000″ body_font_size=”16px” body_line_height=”1.8em” background_color=”#f7f9fc” custom_padding=”32px|24px|32px|24px|true|true” border_radii=”on|20px|20px|20px|20px” border_width_all=”2px” border_color_all=”#1a3c6e” global_colors_info=”{}”]<\/p>\n Some believe nominee directors are merely a \u201cface\u201d of the company. In reality, nominee directors on ACRA filings are the same as any other statutory directors, with the same statutory responsibilities and liabilities for breaches by the company, even if acting under instructions (s.<\/span>386AL<\/span><\/a>).<\/span><\/p>\n [\/et_pb_blurb][et_pb_blurb title=”Financial Statement Responsibility Does Not Apply to Small Firms” use_icon=”on” _builder_version=”4.27.6″ _module_preset=”default” header_font=”|700|||||||” header_text_color=”#1a3c6e” header_font_size=”22px” header_line_height=”1.8em” body_text_align=”justify” body_text_color=”#000000″ body_font_size=”16px” body_line_height=”1.8em” background_color=”#f7f9fc” custom_padding=”32px|24px|32px|24px|true|true” border_radii=”on|20px|20px|20px|20px” border_width_all=”2px” border_color_all=”#1a3c6e” global_colors_info=”{}”]<\/p>\n Even exempt private companies must maintain accounting records and prepare financial statements. Exemptions only affect audit requirements, not the fundamental obligation to keep accurate records (s.<\/span>199<\/span><\/a>\u00a0and<\/span> 201<\/span><\/a>).<\/span><\/p>\n [\/et_pb_blurb][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_image src=”https:\/\/glutenfreepleasure.com\/__proxy_domain\/lionsworld.com.sg\/wp-content\/uploads\/2025\/10\/Company-Act-Myth-4.jpg” alt=”Company Act Misconception Blog Conclusion Image Lionsworld” title_text=”Company Act Myth #4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.27.6″ _module_preset=”default” max_width=”860px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_heading title=”Why Do These Misconceptions Persist?” _builder_version=”4.27.4″ _module_preset=”default” title_level=”h3″ title_font=”|700|||||||” title_font_size=”24px” global_colors_info=”{}”][\/et_pb_heading][et_pb_text _builder_version=”4.27.6″ _module_preset=”default” text_text_color=”#000000″ text_font_size=”18px” text_line_height=”1.8em” global_colors_info=”{}”]<\/p>\n SME directors often prioritise business operations over understanding compliance responsibilities, making violations more likely when compliance is delegated. Misunderstandings arise from informal “bad” advice, incorrect assumptions about exemptions, and the belief that size provides protection. However, the Act applies equally to all incorporated companies regardless of size.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” background_color=”#1a2642″ global_colors_info=”{}”][et_pb_row _builder_version=”4.27.6″ _module_preset=”default” max_width=”860px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}”][et_pb_heading title=”Conclusion” _builder_version=”4.27.6″ _module_preset=”default” title_level=”h2″ title_font=”|700|||||||” title_text_color=”#FFFFFF” title_font_size=”32px” global_colors_info=”{}”][\/et_pb_heading][et_pb_text _builder_version=”4.27.6″ _module_preset=”default” text_text_color=”#a8b8d8″ text_font_size=”18px” text_line_height=”1.8em” global_colors_info=”{}”]<\/p>\n The Companies Act 1967<\/strong> is not a guideline for how companies in Singapore should run themselves; it is the law. And compliance is not “red tape”! It is the legal framework that protects shareholders, safeguards individual directors, and ensures the integrity of business transactions.<\/p>\n Key takeaways:<\/strong> SMEs should ensure they issue share certificates on time, properly execute resolutions, appoint a qualified corporate secretary, hold required AGMs and file annual returns, maintain statutory registers and minutes, and understand director duties. These steps minimise risks, protect reputations, and enable long-term business success.<\/p>\n Operating without proper compliance protocols is high-risk. When uncertain, consult your corporate secretary or professional advisor immediately. Time invested in understanding and adhering to requirements prevents costly non-compliance consequences.<\/p>\n [\/et_pb_text][et_pb_button button_url=”https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/booking-page” button_text=”Speak to a corporate secretary” button_alignment=”center” _builder_version=”4.27.6″ _module_preset=”default” custom_button=”on” button_text_color=”#FFFFFF” button_bg_color=”#c0392b” button_border_width=”3px” button_border_color=”#c0392b” button_border_radius=”15px” button_font=”|700|||||||” custom_padding=”14px|24px|14px|24px|true|true” button_text_shadow_style=”preset1″ box_shadow_style=”preset3″ global_colors_info=”{}”][\/et_pb_button][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" The Companies Act 1967 (Cap. 50) often intimidates SME leaders, who think it is irrelevant and best left to lawyers or corporate secretaries. However, misunderstanding the Act\u2019s requirements often leads to compliance failures. These failures cost SMEs money and damage their reputations. This article examines the most common SME misconceptions about the Companies Act and clarifies the facts all company directors must know.Some believe that since shareholder details are registered with ACRA, physical share certificates are no longer necessary.\u2713 Reality: Share certificates provide\u00a0legal proof of ownership\u00a0and must be issued within\u00a060 days of allotment\u00a0or\u00a030 days of transfer. Non-compliance incurs a fine of up to S$1,000 per violation. Beyond compliance, certificates establish shareholder rights and enable future transfers and financing. Share certificates are legally mandatory \u2014 treating them as optional invites disputes and repeated penalties.Certain directors believe that a single signature or an informal agreement can validate important matters.\u2713 Reality: There are two types of resolutions under the Companies Act: board resolutions (for management decisions) and shareholder resolutions (for ownership matters). Board Resolutions:\u00a0Typically passed at meetings or by unanimous written consent.\u00a0For execution of documents, at least\u00a0two directors, or\u00a0one director and the secretary, must sign (or one director plus a witness). Shareholder resolutions: […]<\/p>\n","protected":false},"author":1,"featured_media":261836,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"2880","footnotes":""},"categories":[21],"tags":[],"class_list":["post-261831","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-secretarial-service"],"_links":{"self":[{"href":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-json\/wp\/v2\/posts\/261831","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-json\/wp\/v2\/comments?post=261831"}],"version-history":[{"count":15,"href":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-json\/wp\/v2\/posts\/261831\/revisions"}],"predecessor-version":[{"id":263506,"href":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-json\/wp\/v2\/posts\/261831\/revisions\/263506"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-json\/wp\/v2\/media\/261836"}],"wp:attachment":[{"href":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-json\/wp\/v2\/media?parent=261831"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-json\/wp\/v2\/categories?post=261831"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/www.lionsworld.com.sg\/wp-json\/wp\/v2\/tags?post=261831"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\u2713 Reality:<\/span><\/h4>\n
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