Types of Obligations

Director’s Obligations

Key Statutory Responsibilities

1.      Act honestly and use reasonable diligence in discharging his or her duties.

2.      Ensure proper accounting records are maintained.

3.      Approve financial statements where applicable.

4.      Ensure statutory registers are properly maintained.

5.      Ensure timely filing of statutory documents with ACRA.

6.      Safeguard company assets.

7.      Comply with the Companies Act, Constitution and other applicable legislation.

Fiduciary Duties

Under Singapore law, directors are expected to:

1.       Act in the company's best interests and in good faith.

2.        Exercise powers for a proper purpose.

3.        Avoid conflicts of interest.

4.        Not misuse confidential information or company assets.

5.        Avoid making secret profits from their position.

Relevant Companies Act Provisions

Some key provisions include:

1.       Section 157 – Duty to act honestly and use reasonable diligence.

2.       Section 156 – Disclosure of interest of director.

3.        Section 199 – Duty to keep proper accounting records.

4.        Section 197 – Requirement to file Annual Returns with ACRA.

Circumstance of Disqualification

Factors considered for Disqualification

Common Grounds for Disqualification

        An individual may be disqualified if he or she:

1.      Is an undischarged bankrupt (unless permitted under applicable law);

2.      Has been convicted of offences involving fraud or dishonesty;

3.      Has committed offences relating to the promotion, formation or management of companies;

4.      Has been persistently in default of filing requirements under the Companies Act;

5.      Has been disqualified by the Court or under the Companies Act.

Relevant Companies Act Provisions

        Statutory provisions include:

1.      Section 148 – Disqualification of undischarged bankrupts from acting as directors or taking part in the management of companies (unless the required permission has been obtained).

2.      Section 154 – Disqualification to act as director on conviction of certain offences.

A person who becomes disqualified must immediately cease acting as a director unless the disqualification has been removed or leave has been granted by the Court where applicable.