Businesspersons, established and budding would-be entrepreneurs operating in Singapore must maintain a close watch on changes in the law. One law getting much focus lately is the Companies Act. Let us examine the recent updates and how they may affect you or your business.
A Brief Overview of the Companies Act
The question is, what exactly is the Companies Act? Well, it is the main law regulating the incorporation, operation, and dissolution of companies in Singapore. Formed as far back as 1967, it’s the kind of legislation that always evolves with the times.
Companies Act Singapore: Recent Changes and Their Impact
1. Expansion of Digital Capabilities (2024)
In 2024, the Accounting and Corporate Regulatory Authority (ACRA) introduced a suite of digital enhancements to streamline business processes. This includes:
- Enhanced e-filing systems for annual returns and financial statements
- AI-powered chatbots for basic inquiries
- Blockchain-based verification for certain corporate documents
These changes aim to reduce paperwork and make compliance easier for businesses of all sizes.
Also Read:- Guidelines for Vendors on AIS Submission in Singapore
2. Sustainability Reporting Requirements (2025)
With the global push towards sustainability, Singapore isn’t falling behind. Starting in 2025, all listed companies will be required to include sustainability reports in their annual filings. This includes:
- Disclosure of environmental impact
- Social responsibility initiatives
- Corporate governance practices
While this primarily affects listed companies, it’s a good idea for all businesses to start thinking about their sustainability practices.
3. Simplified Striking Off Procedures (2024)
Sometimes, a business just doesn’t work. The striking-off process for companies will be made easier in 2024. Now, companies can apply to strike off online through the ACRA BizFile+ portal if they meet certain criteria. This important step will help business owners to be less hassled and less costly if they need to close down.
4. Improved Protection for Minority Shareholders (2025)
To provide minority shareholders with a degree of protection, the Companies Act was amended in 2025 to introduce:
- Mandatory independent valuation of certain transactions
- Expanded rights of shareholders to call extraordinary general meetings
- Increased disclosure on related party transactions
These amendments are expected to further improve corporate equity and clarity.
5. Goodbye to Audit Exemption Thresholds (2024)
This is good news for smaller businesses! In 2024, audit exemption thresholds were revised. More small businesses can be granted audit exemption, saving money and time. The new thresholds are:
- Annual revenue of less than 10 million (up from 5 million);
- Total assets of less than 10 million (up from 5 million);
- Number of employees less than 50 (unchanged).
- Meet two of these criteria, and you could be off the hook for a mandatory audit.
6. Introduction of Variable Capital Companies (VCCs) Framework Updates (2025)
The Variable Capital Companies (VCC) framework was reinvigorated after its introduction in 2020 through its substantial 2025 amendments. They included:
- A wide variety of units
- Enhanced tax breaks for VCCs
- Easier registration
With these updates, Singapore aims to further establish itself as a fund management hub globally.
Also Read:- Optimizing Your Singapore Tax: Claiming Business Expense Deductions
Companies Act Singapore: What These Changes Mean to You
This review of the Companies Act could embody a game-changer for you if you are already running a business in Singapore or are seeking to start one. Below are a few takeaways worth considering:
- Get digital: Given ACRA’s mandate for digital solutions, getting comfortable with online platforms and computer-aided filings is of utmost importance.
- Think sustainability: Even if you are not obliged to prepare a sustainability report, it is good for businesses to start to give more thought to your milling and social impacts.
- Know Your Rights: Whether in majority or minority shareholders, being set on the rights and responsibilities is absolutely important.
- Find out the requirements for auditing: As a small company, some exemptions to audit obligations might save you audit costs.
- Consider the new business structures: The updates to the VCC framework might open entirely new opportunities for fund management and investment, all in their entirety.
Conclusion
The Companies Act in Singapore is not stagnant; it acknowledges business needs and the global economic environment changes. Keeping abreast with these changes would be to ensure your business is compliant but also to capitalize on opportunities presented.
Mind you, this blog post merely gives an overview of recent changes. It is advisable to seek professional legal and financial guidance that is tailored specifically to your business needs. The business world is ever-changing and thus are the rules regulating it. Stay up to date, stay nimble, and your businesses would be well-positioned to thrive in Singapore’s dynamic economy.
