COMPANY LAW: MEMBERS, DIRECTORS AND OTHERS
MEMBERS
Section 190(1) of the Companies Law
It provides that every company shall keep a register of members.
Section 22 of the Companies Law
It provides that the first members, known as subscribers, must be named in the memorandum of
association.
Section 19(6) of the Companies Law
It provides that subsequent members whose names appear in the register of members become
members of the company.
- Not all shareholders of the company are members of the company. Only those shareholders
whose names appear on the register of members.
- Exception: people who buy scripless shares in the market become members without having to
take the trouble to register in the company’s register of members.
NUMBER OF MEMBERS
Section 17 of the Companies Law
It provides that each company must have at least one member, and there is no maximum number
of members.
Section 18 of the Companies Law
It provides that if there are more than 50 members, the company cannot be registered as a
private company.
MEMBERS AND MANAGEMENT
Section 157(A) of the Companies Law
It provides that directors have the power to manage the company.
- Hence, members cannot tell the director what to do.
- If they are unhappy over management decisions, the articles of association would usually allow
the members to remove the directors by ordinary resolution.
- The members also have the option of altering the articles of association, if they manage to
garner the requisite number of votes, to confer particular power on themselves.
- Exceptions:
Section 161 and 160 of the Companies Law
It provides that when the company wants to issue shares, or dispose of the whole or a
substantial part of is undertaking or property, the approval of the members is necessary.
Section 26 and 37 of the Companies Law
It provides that if the memorandum or articles of association are to be named, the approval of
members is required.
LIABILITIES OF MEMBERS
Section 250 of the Companies Law
It provides that if the company is being wound up, and the shareholder has yet to pay up on his
shares, he may be called to do so by the company.
, COMPANY LAW: MEMBERS, DIRECTORS AND OTHERS
MEMBERS’ RIGHTS
(a) Right to enforce the memorandum and articles of association
Section 39 of the Companies Law
It provides that the memorandum and articles of association represents a contract between the
members and the company, and as between members.
- Hence members can enforce the terms of the memorandum and articles of association against
the company and vice versa.
- The articles of association usually do not provide that dividends must be declared, even if there
are available profits.
(b) Right to amend the memorandum and article of association
Section 26 of the Companies Law
It provides that the memorandum of a company may be amended by a special resolution.
Section 37 of the Companies Law
It provides that subject to provisions of the Companies Act and the memorandum, the articles of
association of a company too can be removed or altered by means of special resolution.
Section 26(A) of the Companies Law
It provides that companies are allow to declare certain provisions in the memorandum or articles
of association to be ‘entrenched’.
- Entrenched: entrenched provisions cannot be altered at all or may be altered only if some
further conditions are satisfied.
(c) Right to information
Section 192, 173 and 164 of the Companies Law
It provides that the member may inspect various registers held by the company, such as the
register of members, register of directors, and the register of director’s shareholdings.
Section 203 of the Companies Law
It provides that the company’s balance sheet and profit and loss accounts have to be sent to the
members prior to the annual general meeting.
Section 189 of the Companies Law
It provides that members have the right to inspect the minutes of meetings.
(d) Right to be treated fairly
Section 216(1) of the Companies Law
It provides that the member has the right to apply to court if, amount other things, the affairs of
the company are being run oppressively or in disregard of the members’ interest.
- This section can only be invoked if there is element of unfairness or a visible departure from
standards of fair dealing.
Section 216(2) of the Companies Law
It provides that upon hearing such an application, the court has wide discretion as to what it can
do.
, COMPANY LAW: MEMBERS, DIRECTORS AND OTHERS
(e) Right to attend meetings and vote
- The members’ stand on various matters is usually established through resolutions passed at
members’ meetings.
- There are two types of members’ meetings: Annual General Meeting and Extraordinary
General Meeting
Section 175(1) of the Companies Law
It provides that annual general meeting must be held once every calendar year.
Section 175(4) of the Companies Law
It provides that failing to hold an annual general meeting is an offence.
Section 175A of the Companies Law
It provides that private companies are allowed to dispense with the need to have annual general
meetings, if all the members so agree to dispense with it.
Section 201 of the Companies Law
It provides that the profit and loss account and the balance sheet must be laid before the
members at the annual general meeting.
Section 205 of the Companies Law
It provides that the appointment of the auditors must be done at the annual general meeting.
- The articles of association will usually provide that at the annual general meeting, the
appointment and remuneration of directors must be determined and that members must
approve the dividends declared by the directors.
Section 184(A) of the Companies Law
It provides that, for private company, it is possible in certain circumstances to get a resolution
passed by written means instead of convening an actual meeting.
- Notice has to be given to the members when an actual meeting is called.
Section 184 of the Companies Law
It provides that for the case of special resolution, at least a 21-day notice has to be given in the
case of a public company, and at least 14-day notice has to be given in the case of a private
company.
Section 177(2) of the Companies Law
It provides that for the case of ordinary resolution, at least 14-day notice has to be given.
Section 177(3) and 184(2) of the Companies Law
It provides that shorter notice can be given in certain circumstances.
Hup Seng Co Ltd v Chin Yin
It was held that if the notice did not set out the text of the resolution for members to decide
whether or not to attend the meeting, the resolution passed during the meeting may be
invalidated.
Section 181 of the Companies Law
It provides that instead of personally attending a meeting, they may send a proxy to vote on their
behalf by filling up the proxy form that would usually accompany a notice of a meeting.
, COMPANY LAW: MEMBERS, DIRECTORS AND OTHERS
- Only the number of votes received is relevant, those not voting are not taken into account.
COMPANY SECRETARY AND AUDITOR
Section 171(1) of the Companies Law
It provides that every company shall have one or more secretaries who must be the resident in
Singapore.
Section 171(3) of the Companies Law
It provides that the company secretary has to be appointed by the directors
Section 171(1AA) of the Companies Law
It provides that in the case of a public company, the company secretary would need to have
certain qualifications.
Section 171(1AB) of the Companies Law
It provides that in the case of a private company, it is not necessary to appoint such
professionally qualified persons.
Section 205 of the Companies Law
It provides that every company has to have an auditor or auditors.
Section 205(C) of the Companies Law
It provides that an exempt private company may be exempted from appointing auditors or having
an audited account in respect of a financial year if its revenue for that year falls below a certain
prescribed amount.
DIRECTORS
Section 145(1) of the Companies Law
It provides that every company shall have at least one director who shall be ordinarily resident of
Singapore.
Section 4(1) of the Companies Law
It provides that a person, in accordance with whose directions or instructions the officers of the
company are accustomed to act, or any person acting as an alternate or substitute director,
would also be considered a director.
- Hence would be subjected to all duties imposed on directors.
QUALIFICATION
Section 145(2) of the Companies Law
It provides that the director must be a natural person who is at least 18 years of age and who
has full legal capacity.
Section 153(1) of the Companies Law
It provides that the maximum age for directors is 70 for public companies.
MEMBERS
Section 190(1) of the Companies Law
It provides that every company shall keep a register of members.
Section 22 of the Companies Law
It provides that the first members, known as subscribers, must be named in the memorandum of
association.
Section 19(6) of the Companies Law
It provides that subsequent members whose names appear in the register of members become
members of the company.
- Not all shareholders of the company are members of the company. Only those shareholders
whose names appear on the register of members.
- Exception: people who buy scripless shares in the market become members without having to
take the trouble to register in the company’s register of members.
NUMBER OF MEMBERS
Section 17 of the Companies Law
It provides that each company must have at least one member, and there is no maximum number
of members.
Section 18 of the Companies Law
It provides that if there are more than 50 members, the company cannot be registered as a
private company.
MEMBERS AND MANAGEMENT
Section 157(A) of the Companies Law
It provides that directors have the power to manage the company.
- Hence, members cannot tell the director what to do.
- If they are unhappy over management decisions, the articles of association would usually allow
the members to remove the directors by ordinary resolution.
- The members also have the option of altering the articles of association, if they manage to
garner the requisite number of votes, to confer particular power on themselves.
- Exceptions:
Section 161 and 160 of the Companies Law
It provides that when the company wants to issue shares, or dispose of the whole or a
substantial part of is undertaking or property, the approval of the members is necessary.
Section 26 and 37 of the Companies Law
It provides that if the memorandum or articles of association are to be named, the approval of
members is required.
LIABILITIES OF MEMBERS
Section 250 of the Companies Law
It provides that if the company is being wound up, and the shareholder has yet to pay up on his
shares, he may be called to do so by the company.
, COMPANY LAW: MEMBERS, DIRECTORS AND OTHERS
MEMBERS’ RIGHTS
(a) Right to enforce the memorandum and articles of association
Section 39 of the Companies Law
It provides that the memorandum and articles of association represents a contract between the
members and the company, and as between members.
- Hence members can enforce the terms of the memorandum and articles of association against
the company and vice versa.
- The articles of association usually do not provide that dividends must be declared, even if there
are available profits.
(b) Right to amend the memorandum and article of association
Section 26 of the Companies Law
It provides that the memorandum of a company may be amended by a special resolution.
Section 37 of the Companies Law
It provides that subject to provisions of the Companies Act and the memorandum, the articles of
association of a company too can be removed or altered by means of special resolution.
Section 26(A) of the Companies Law
It provides that companies are allow to declare certain provisions in the memorandum or articles
of association to be ‘entrenched’.
- Entrenched: entrenched provisions cannot be altered at all or may be altered only if some
further conditions are satisfied.
(c) Right to information
Section 192, 173 and 164 of the Companies Law
It provides that the member may inspect various registers held by the company, such as the
register of members, register of directors, and the register of director’s shareholdings.
Section 203 of the Companies Law
It provides that the company’s balance sheet and profit and loss accounts have to be sent to the
members prior to the annual general meeting.
Section 189 of the Companies Law
It provides that members have the right to inspect the minutes of meetings.
(d) Right to be treated fairly
Section 216(1) of the Companies Law
It provides that the member has the right to apply to court if, amount other things, the affairs of
the company are being run oppressively or in disregard of the members’ interest.
- This section can only be invoked if there is element of unfairness or a visible departure from
standards of fair dealing.
Section 216(2) of the Companies Law
It provides that upon hearing such an application, the court has wide discretion as to what it can
do.
, COMPANY LAW: MEMBERS, DIRECTORS AND OTHERS
(e) Right to attend meetings and vote
- The members’ stand on various matters is usually established through resolutions passed at
members’ meetings.
- There are two types of members’ meetings: Annual General Meeting and Extraordinary
General Meeting
Section 175(1) of the Companies Law
It provides that annual general meeting must be held once every calendar year.
Section 175(4) of the Companies Law
It provides that failing to hold an annual general meeting is an offence.
Section 175A of the Companies Law
It provides that private companies are allowed to dispense with the need to have annual general
meetings, if all the members so agree to dispense with it.
Section 201 of the Companies Law
It provides that the profit and loss account and the balance sheet must be laid before the
members at the annual general meeting.
Section 205 of the Companies Law
It provides that the appointment of the auditors must be done at the annual general meeting.
- The articles of association will usually provide that at the annual general meeting, the
appointment and remuneration of directors must be determined and that members must
approve the dividends declared by the directors.
Section 184(A) of the Companies Law
It provides that, for private company, it is possible in certain circumstances to get a resolution
passed by written means instead of convening an actual meeting.
- Notice has to be given to the members when an actual meeting is called.
Section 184 of the Companies Law
It provides that for the case of special resolution, at least a 21-day notice has to be given in the
case of a public company, and at least 14-day notice has to be given in the case of a private
company.
Section 177(2) of the Companies Law
It provides that for the case of ordinary resolution, at least 14-day notice has to be given.
Section 177(3) and 184(2) of the Companies Law
It provides that shorter notice can be given in certain circumstances.
Hup Seng Co Ltd v Chin Yin
It was held that if the notice did not set out the text of the resolution for members to decide
whether or not to attend the meeting, the resolution passed during the meeting may be
invalidated.
Section 181 of the Companies Law
It provides that instead of personally attending a meeting, they may send a proxy to vote on their
behalf by filling up the proxy form that would usually accompany a notice of a meeting.
, COMPANY LAW: MEMBERS, DIRECTORS AND OTHERS
- Only the number of votes received is relevant, those not voting are not taken into account.
COMPANY SECRETARY AND AUDITOR
Section 171(1) of the Companies Law
It provides that every company shall have one or more secretaries who must be the resident in
Singapore.
Section 171(3) of the Companies Law
It provides that the company secretary has to be appointed by the directors
Section 171(1AA) of the Companies Law
It provides that in the case of a public company, the company secretary would need to have
certain qualifications.
Section 171(1AB) of the Companies Law
It provides that in the case of a private company, it is not necessary to appoint such
professionally qualified persons.
Section 205 of the Companies Law
It provides that every company has to have an auditor or auditors.
Section 205(C) of the Companies Law
It provides that an exempt private company may be exempted from appointing auditors or having
an audited account in respect of a financial year if its revenue for that year falls below a certain
prescribed amount.
DIRECTORS
Section 145(1) of the Companies Law
It provides that every company shall have at least one director who shall be ordinarily resident of
Singapore.
Section 4(1) of the Companies Law
It provides that a person, in accordance with whose directions or instructions the officers of the
company are accustomed to act, or any person acting as an alternate or substitute director,
would also be considered a director.
- Hence would be subjected to all duties imposed on directors.
QUALIFICATION
Section 145(2) of the Companies Law
It provides that the director must be a natural person who is at least 18 years of age and who
has full legal capacity.
Section 153(1) of the Companies Law
It provides that the maximum age for directors is 70 for public companies.
