The Companies Act 2014: Key Responsibilities for Directors

If you’re a director of a Singapore company, the Companies Act 2014 is your operational guide. Whether you’re running a small business or a large firm, this law clearly defines your duties. Ignoring it can lead to significant repercussions.

Here’s a straightforward guide to what you need to know.

1. Your Role Carries Legal Responsibility

A directorship is more than a symbolic role. The Companies Act 2014 makes you legally accountable for the company’s management. You’re required to act honestly, prioritize the company’s interests, and exercise reasonable diligence.

If problems like financial errors or inadequate records occur, saying “I didn’t know” won’t protect you. The law expects you to be proactive.

2. Essential Duties You Must Follow

The Act outlines non-negotiable responsibilities:

• Act in good faith: The company’s interests must always come before personal gain.
• Declare conflicts of interest: Any personal or financial stake in a deal must be disclosed.
• Avoid misusing your role or information: Using your position for personal benefit or to harm the company is a violation.
• Exercise reasonable care: Informed, responsible decision-making is required, even for non-operational directors.

These obligations apply to all directors, regardless of their involvement in daily operations.

3. Mandatory Records and Filings

The law requires companies to keep accurate records, such as accounting books, meeting minutes, and shareholder registers. Annual returns must be submitted to ACRA (Accounting and Corporate Regulatory Authority) on schedule. Directors can be held liable for non-compliance.

Corporate secretarial services can help here. A competent company secretary ensures filings are timely and accurate, but directors must still oversee the process.

4. Requirement for a Company Secretary

Every Singapore company must appoint a company secretary to handle compliance and maintain records. The Companies Act 2014 mandates:

• A secretary must be appointed within six months of incorporation.
• The appointee must be qualified, such as a lawyer, accountant, or experienced professional.
• A sole director cannot also be the company secretary.

Non-compliance can lead to penalties, and without proper support, key duties may be overlooked.

5. Financial Reporting Mandates

Depending on your company’s structure and size, audited financial statements may be required. Even without an audit, accurate financial records are mandatory.

These records are vital for shareholders, investors, and regulators. Errors or omissions can result in fines or criminal charges for directors.

6. Annual General Meetings (AGMs)

Private companies can avoid AGMs by sending financial statements to shareholders within five months of the financial year-end, unless shareholders demand a meeting. Public companies must hold AGMs.

AGMs are a legal obligation and an opportunity to connect with shareholders. Mishandling or skipping them can lead to breaches.

7. Consequences of Non-Compliance

Failing to follow the Companies Act can lead to harsh penalties, including fines, disqualification, or jail time. The law applies whether the breach was intentional or not.

Directors must stay proactive—ignorance is no excuse.

8. Leverage Expert Assistance

Running a company is demanding, and compliance adds another layer. Many directors turn to corporate secretarial services to manage:

• Timely ACRA filings
• Statutory record maintenance
• AGM and board meeting coordination
• Ensuring the company secretary meets legal requirements

While such services help, directors remain responsible for compliance.

Final Thoughts

The Companies Act 2014 is a critical guide for Singapore directors, defining your duties and the penalties for non-compliance.

You don’t need to memorize every section, but you must grasp your core obligations and ensure they’re fulfilled.

If you’re unsure about compliance, consult your company secretary or consider corporate secretarial services. Proactive steps now can save you from trouble later.