In 2017 (effective 31/3/2017), following 1MDB debacle, as part of Singapore improvement on the transparency of beneficial ownership and to delayer the use of corporate veil to mask the ultimate controller, all Companies both local and foreign as well as LLPs are required to maintain a non-public register for Registrable Controllers (aka Beneficial Owners or ultimate controller).

Currently, an individual(s) or corporate shareholder(s) is taken to be a Registrable Controller(s) by a standard threshold of > 25% either by Significant Interest by way of right to profit share (for normal profit-making companies) or Significant Control by way of direct or indirect members’ voting rights (for Companies limited by Guarantee “CLG”). This leaves a potential undefined state in diversified shareholding companies where no dormant significant interest is held in a large minority and independent shareholders’ base with numerous shareholders holding significantly less than 25% shareholdings. Similarly, the same no man’s land is also common in CLG with 1 person 1 vote structure of members > 3 members.

This seemingly option of a back-door pass on the current regulatory regime will soon no longer be an available option. 

As a standard precursor to legislative implementation likely to be by the end of this year, the Ministry of Finance (MOF) and the Accounting and Corporate Regulatory Authority (ACRA) have commenced a public consultation (2/7/2021) to gather public feedback on proposed changes to the Companies Act (CA) and Limited Liability Partnership Act (LLP Act) on the draft Corporate Registers (Miscellaneous Amendments) Bill (CRMA Bill) relating to transparency and beneficial ownerships of companies and limited liability partnerships (LLPs).  

Amongst the 4 main amendments proposed, including specific timeline (instead of the current silent timeline) for foreign companies to update its register of members within 14 days; specific timeline (instead of the current silent timeline for local companies to update its register of nominee directors within 7 days; additional requirements now for local and foreign companies to keep a non-public register of nominee shareholders and update this within 7 days; the most notable, is the following “default Registrable Controller rule”.

Company or LLP that is unable to identify its Registrable Controller(s), either because it knows or has reasonable grounds to believe that the entity has no Registrable Controller(s) or has a Registrable Controller(s) but has not been able to identify the Registrable Controller(s) will now have to update within 2 days, all directors with executive control and its chief officer as its Registrable Controller(s). This group of persons is the default Registrable Controller and they do not need to be notified.

With the progressive approach of ACRA and MOF, whatever land as it may be under no man’s is now to be named, either you name it or it will be named for you.