Our first article Complying With Singapore Statutory Requirements in The Legal Stuff section detailed the information you need to know about a company’s compliance with Singapore’s statutory law. Among the statutory requirements, a Private Limited Company must appoint at least one local resident Company Director upon its incorporation.

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Who is a Company Director, and what does he or she do? Let’s find out the answers in this article.

Who Is A Company Director?

A Director is a person in your company who is responsible for managing its affairs and providing it with strategic directions. To be a Director, the person must

  • Make decisions objectively;
  • Act in the best interest of the company; and
  • Be honest and diligent in carrying out his or her duties.

If you are the founder, co-founder or shareholder of the company, you can be a Director. Legally, there is no difference between an “active”, “inactive” or “sleeping” Director. Regardless of the level of participation in the company’s affair, the Director has to ensure that the company complies with regulatory requirements.

Why Do I Need A Company Director?

Under Section 145 (1) of the Singapore Companies Act (Cap. 50), a company incorporated in Singapore must nominate at least one Director who is an ordinarily resident (a Singapore citizen, PR or EntrePass holder) in Singapore. While you need at least one Director, there is no limit to the number of local or foreign Directors the company can appoint.

What Is The Company Director’s Responsibility?

A Company Director carries a heavy responsibility. He or she is responsible for ensuring that the company complies with all its statutory requirements in a timely manner. These statutory requirements include:

  • Holding the company’s Annual General Meeting (AGM);
  • Filing of Annual Returns by the specified due dates after the AGM;
  • Keeping records of statutory registers, including the register of members, register of directors, managers, secretaries and auditors, register of directors’ shareholdings, and register of charges;
  • Maintaining proper accounting records of the company;
  • Notifying ACRA of any changes in the Company’s Directors, Secretaries, Auditors and Managers, etc.; and
  • Notifying ACRA of any changes in Director’s shareholdings.

For more information about statutory requirements, please refer to our article Complying With Singapore’s Statutory Requirements.

Most importantly, once you are appointed as a Director, you are the fiduciary of the company, and you carry the fiduciary duties. This means that you must use reasonable diligence to discharge your duties and act in good faith and in the best interest and benefit of the company. You are also expected to have a responsibility:

  • To avoid conflicts of interest;
  • Of care, skill and diligence; and
  • To not misuse powers and information to gain an advantage for yourself or any other person that causes detriment to the company.

Who Can Be A Company Director?

A Company Director must be a person who is

  • 18 years old and above;
  • An ordinarily resident (a Singapore citizen, PR or an EntrePass holder) in Singapore or an Employment Pass holder (subject to compliance with prevailing regulations on the employment of foreign worforce); and
  • Not a bankrupt or convicted of offences involving fraud or dishonesty.

What If I’m Not Eligible To Be A Company Director?

What if you want to incorporate a company in Singapore but are not eligible to be your company’s Director?

If your company is 100% foreign-owned and you’re not an ordinarily resident or are not eligible to be a Director for other reasons, you can appoint a Nominee Director to act as the Local Director.

To help you fulfil this mandatory Companies Act requirement, many local professional corporate services firms can provide you with a Nominee Director who is ordinarily a resident in Singapore. Having said that, as the person will be playing a pivotal role in your company, do make sure that you’re appointing a competent person as your Nominee Director. Be sure to check the qualifications and experience of the person and ask for references where necessary.

Final Note on Company Director: The Company Director is a serious appointment. If you’re appointed as one, you should be fully aware of what you’re in for. If you are already a Director and are unsure if you have breached your fiduciary duties, you should seek professional advice. Don’t wait until it is too late because if you are found guilty of breaching the Director’s duties, you may be subject to either civil and/or criminal liabilities.

More information on a Director’s responsibility and duties can be found in a handbook by ACRA  ‘ACRA & I – Being an Effective Director’, which guides new or aspiring directors on the statutory duties of a director. The handbook is available for download for free.

About the Writer:

Judy Tham is a writer and founder of One Elephant, a copywriting firm in Singapore. She co-authored Are You Brand Dead?, one of the few books on branding in Asia that focuses on SMEs.