What are the Duties and Responsibilities of Company Directors under Singapore Law?

The Singapore Companies Act (CA) confers the ultimate power and authority in the directors for managing the company affairs and mandates certain statutory duties and fiduciary responsibilities for company directors.

What are the Duties and Responsibilities of Company Directors under Singapore Law?

The Singapore Companies Act (CA) confers the ultimate power and authority in the directors for managing the company affairs and mandates certain statutory duties and fiduciary responsibilities for company directors.

Any violation of statutory duties as enforced by the Accounting and Corporate Regulatory Authority (ACRA) or Commercial Affairs Department (CAD) will result in criminal proceedings and sanctions. Any breach of common-law obligations may result in liabilities and remedies under civil law.

Statutory Duties of a Director

The directors must fulfill certain statutory duties and responsibilities as outlined in the CA.
Financial Reporting

As more and more Investors, suppliers, financial institutions, customers, company directors, corporate executives are looking for quality financial information to obtain a transparent and accurate picture in terms of value creation and business risks, Sections 201(2) and 201(5) of the Companies Act make company directors responsible to present the financial statement before the company during its annual general meeting that complies with the Accounting Standards issued by the Accounting Standards Council.

The directors are also responsible for maintaining a system of internal accounting controls and keeping proper accounting and other records that will enable the preparation of true and fair financial statements under sections 199(2A) and 199(1) of the Act, respectively.

The financial statements must, at all times, be easily accessible for inspection by the directors and inability to do so will render the company and the directors guilty of an offence. These financial statements must be presented to the shareholders every calendar year at the AGM. The financial statements need to be presented within 6 months of the financial year end of the Company.

The directors of a company should preferably be financially literate and discharge their duties of financial reporting through financial statement reviews, the appointment of financially competent management, internal accounting control and outsourcing professional accounting service providers.

Convening Meetings
The Companies Act mandates three important meetings to be held by a company including Statutory General Meeting as per Section 174 of the Companies Act and to be held only once after company incorporation, Annual General Meeting (AGM) as per Section 175 of the Companies Act and Extraordinary General Meeting (EGM) as per Section 176 of the Companies Act.
Appointing Company Secretary
The directors of a company, as per Section 88 of the CA must appoint a secretary of the Company within 6 months from the date of incorporation and ensure that the secretary appointed has the requisite experience and qualification. The company secretary must be a natural person, locally resident in Singapore. The sole director of a company and the company secretary cannot be the same person.

Want to learn more about Duties and Responsibilities of Company Directors?

Speak to one of our experts today.
Appointing Auditors
Section 205 of the CA mandates that the directors of a company need to appoint either an accounting entity or entities as an auditor, within 3 months of the incorporation of the Company (unless your company is exempted from audit requirements).
Issuing Shares
Under Section 161 of the CA, the directors of a company are responsible for issuing shares, once approved by the shareholders at the AGM.
Paying Dividends
Section 403 of the Companies Act mandates that the company can pay dividends only from the profits generated by the company. The directors of a company are responsible to put this in effect.

Disclosure of Interests in Transactions

Under section 156 of the CA, the directors need to comply with disclosure and reporting requirements. The disclosure must be made, at a directors’ meeting, if he or she is interested in a transaction or proposed transaction with the company. This disclosure is not mandatory if the interest of the director is only in being a member or creditor of a corporation that wants a transaction and interest of director regarded as without any material interest.

Besides, the director must also disclose the nature, character and extent of any conflicts with the directors’ duties that may come up with his or her holding possessing property or holding office.

Non-compliance with the disclosure may lead to a monetary penalty not exceeding SGD 5000 or imprisonment for a maximum of 12 months.

Acting Honestly and Diligently
Section 157 of the CA mandates directors to act honestly and diligently in the discharge of their duties without making any improper use of information acquired by being director of a company for personal gain and advantage. Any violation in this regard may attract monetary and criminal sanctions.
Fiduciary Responsibilities of a Director
The common law lays down the following responsibilities for the directors of a company in Singapore.

Your vision, our mission.
Let's discuss

A Member Firm of Andersen Global
Need Assistance?
Get In Touch

We appreciate your interest in IMC and are eager to address your needs.

To ensure we address your needs accurately and promptly, please fill out this form. This will help us in identifying and connecting you with the appropriate team of experts in our organization.

We take pride in our responsiveness and aim to get back to you within a span of 1-2 business days. Your journey towards solutions starts here.

Companies we have worked with

Let's Talk