Following the recent S$2.4b anti-money probe on the 10 suspects linked to 20 Singapore live companies, 11 were not present or operating at their ACRA registered businesses. The registered business addresses for these suspects are in essence used as a shadow address for shell companies to perpetuate illicit activities.
However, for companies that are operating genuine businesses in Singapore, it is important now to understand how is this registered address relevant and how this will impact you as companies or as directors of the companies. A Company may conduct its business activities at a business address other than its registered address eg a F&B company may have its business address at the retail address (where it operates its restaurant and serves its patrons) while its registered address at its HQ address.
Singapore companies are required to maintain physical presence of a registered business address that is accessible to the public for at least three hours during business hours on each business day. The following records are required to be kept at the registered business address (or if applicable, the registered office of the Company Secretary or Filing Agent):
- Company books and records
- Register of Registrable Controller (RORC)
- Register of Nominee Shareholder (RONS)
- Register of Nominee Director (ROND)
The improper use of registered address will affect you (as a company or as its company directors):
- Penalty and fine of $5,000 under Section 142(1) – Failure of a company to have a Registered office address, Section 142(2) Failure to maintain a registered address open and accessible to public for not less than 3 hours during ordinary business hours on each day, Saturdays, weekly and public holidays excepted and Section 143(2) – Failure to notify the Registrar within 14 days of any change in the situation of the registered office address and office hours
- Unable to receive prompt government notices eg IRAS, MOM, ACRA etc
- Unable to receive prompt legal notices from third parties eg legal documents
- Penalty and fine under CTF/AML obligations by ACRA relating to RORC, RONS, ROND as well as an unreachable registered address
With the increased scrutiny from the recent AML probe, it is expected that ACRA will start to move to tighten the regulatory regime. It is now essential that companies or its directors start to examine its compliance to its registered address as well as its overall policies to CTF AML.
Beside the financial penalty, there is the reputational risk exacerbated by the social media for the company or its Board (all directors on the Board) that we have seen in the fallout from the recent probe directly for non-compliance of CTF AML (eg registered business address) or indirectly implicated with the association or using the services of corporate service provider (company secretary) associated with clients under CTF AML investigation. It may be useful as a pre-emptive measure to ask your accountant, company secretary, tax agent, book-keeper or other service provider about their policies on customer due diligence and procedure on CTF AML relating to sources of funds, PEP (Political Exposed Person) checks and commercial substance of clients’ transactions.
The key point to ponder: When wealth is lost, nothing is lost; when health is lost, something is lost; when character is lost, all is lost.
Relevant bulletin to read:
Politically Exposed Persons (PEP): what they are and why they matter dated March 26, 2019
‘Lonely’ woman jailed for money laundering dated January 13, 2014
Man jailed 20 months for role in ‘money mule’ scam dated September 23, 2016
“Too Good to be True” dated April 16, 2021
