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Chapter 1 : Business Vehicles and Small Business
- Limited Partnerships and Limited Liability Partnerships
The CLRFC recommends the introduction of the limited partnership
(modelled after the UK Limited Partnerships Act 1907) and the
limited liability partnership modelled after Title 6, Chapter
17 (Limited Partnerships) of the Delaware Code.
The Limited Liability Partnership structure would be available
to all businesses. These additional business structures would
widen the structures available for businesses and investments
in Singapore.
- Simplification of incorporation and maintenance of private
companies
To reduce incorporation and maintenance costs, the CLRFC recommends
lowering the requirement for private companies in Singapore as
follows:
- One Shareholder/One Director Companies
All private companies incorporated in Singapore are required
to have at least one shareholder and one director who is ordinarily
resident in Singapore. The shareholder and director can be the
same person.
- Professionally Qualified Company Secretaries
The CLRFC affirms and restates the importance of the corporate
secretarial function and for all companies to appoint company
secretaries. The CLRFC recommends that all private companies
be exempted from the statutory requirement to appoint professionally
qualified company secretaries.
- Removal of Statutory Requirement of Audit
The CLRFC recommends that dormant companies, i.e. those who
have not had any significant accounting transactions in a financial
year, be exempted from filing audited accounts for financial
years commencing from 1 January 2003.
Exempt private companies would be exempted from the statutory
requirements for audit for financial years commencing 1 January
2004; instead, they are to file a declaration of solvency every
year. The declaration would be signed by one director who is
authorised to do so for and on behalf of the whole Board, failing
which a set of unaudited accounts must be filed.
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Chapter 2 : Capital Raising, Capital Maintenance and Company Charges
- Capital Raising
The CLRFC recommends the replacement of the ill-defined boundaries
of public and private offerings with a comprehensive list of safe
harbour prospectus exemptions which will also be extended to collective
investment schemes save for where a countervailing public interest
is evident.
The CLRFC also recommends a common statutory regime for both public
equity and bond issues and consequently the repeal of statutory
trustee and trustee covenants.
- Treasury
To provide wider flexibility to companies, the CLRFC recommends
allowing repurchased and redeemed shares to be held in treasury,
but with their voting rights suspended as long as they are held
in treasury. The treasury shares can be used for meeting the obligations
of employee share option schemes, transferring to third parties
to fund acquisitions, or raising cash.
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Chapter 3 : Corporate Governance
- Restatement of Directors' duties
The CLRFC recommends the adoption of the UK's statutory restatement
of the general principles, which bind directors with regards to
entering into transactions with the company, the use of property,
information and opportunities of the company and to benefits from
third parties.
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Chapter 4 : Corporate Insolvency
To provide for orderly and efficient liquidation
and restructuring, the CLRFC recommends the introduction of an omnibus
Insolvency Act and subsidiary legislation for companies and individuals.
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Chapter 5 : Boundaries and Concluding Recommendations
- Disclosure of substantial shareholdings
The CLRFC recommends that the timelines for disclosure of substantial
shareholdings and directors' shareholdings be extended from 2
calendar days to 2 market days.
To facilitate more efficient mergers, the CLRFC recommends the
introduction of a corporate merger/amalgamation process modelled
after Section 188 - Section 194A of the New Zealand Law Commission
Company Law Reform: Transition and Revision Report No. 16.
- Threshold for compulsory acquisition
The CLRFC recommends tightening the provision on compulsory acquisition
along the lines adopted in UK.
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