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Company Director's Role in Singapore and their responsibilities

This blog is intended for those who want an A-Z description of the duties and powers Singapore Company Director. Some of the highlights of this blog include the Director’s duties, their qualification requirement, the procedure of appointment, remuneration and the liabilities. So if you are interested in setting up a company or doing business in Singapore and may take up the directorship position in locally incorporated companies in the future, here’s all you need to know before taking charge.


Under Singapore law, a private company must have at least one director, and a public company must have at three or more. One director must be a local resident of Singapore, who is either a Singapore citizen, Singapore permanent resident or a holder of an Entrepreneur Pass or Employment Pass. He/she should not be disqualified by law to act as a director.

Directors have broad powers of management, as defined by Singapore’s Companies Act and the particular company’s Constitution. In smaller, private companies, the director likely will manage the company’s business, making most of the day-to-day decisions. In larger companies, a director will take on a more supervisory and visionary role while a management team will perform the day-to-day operations. Whether or not directors are employed by the company or being assigned any job titles, they owe the company a statutory and a fiduciary duty and are expected to perform in the way that best serves the company’s interests.

Director’s Role

There is a wide variation to the roles and responsibilities performed by the directors. Some of the common roles are:

  • To establish and implement basic objectives and broad policies of the company,
  • Consistent with its objects as set out in the memorandum and articles of association of the company,
  • To elect officers of the company and to advise, approve, supervise and review the actions and performance of such officers,
  • To acquire, dispose of, charge and safeguard the assets of the company,
  • To approve important or major financial matters and to ensure that proper reports are given to the shareholders,
  • To delegate special powers to others on matters requiring board approval,
  • To maintain, revise and enforce the memorandum and articles of association of the company, and
  • To establish and perpetuate a sound board of directors.

Qualifications And Disqualifications Of A Director (Director Appointment Requirement)

Who Can Be A Director?

In order to be a director in Singapore, you need to be:

  • Over 18 years old,
  • A natural person (that is, a business entity or a business can’t be a director),
  • Of full legal capacity,
  • Of sound mind,
  • A Singapore Citizen, Singapore Permanent Resident or EntrePass holder,
  • A director may also be an Employment Pass (EP) holder. However, a EP holder wishing to become the director of a local company must first get a Letter of Consent (LOC) from the Ministry of Manpower.

Who Cannot Be A Director?

You cannot be a director if you are:

  • An unfit director from another company,
  • An undischarged bankrupt,
  • A person involved in offenses such as dishonesty or fraud that is punishable with imprisonment of 3 months or more either in Singapore or elsewhere,
  • A director of a company that was wound up due to interest or national security,
  • A person convicted of any offence under Part XII of the Securities and Futures Act (Cap. 289), where the conviction was on or after 1 July 2015
  • A person subject to the imposition of a civil penalty under section 232 of the Securities and Futures Act on or after 1 July 2015,
  • A person where a disqualification order was made against the person in addition to any other sentence imposed.

Who Elects A Company Director?

Directors are elected by the shareholders. They manage or direct the affairs of a corporation and typically make only major business decisions. They elect and monitor the activities of the officers

Nominee / Local/ Resident Director

Every company that is registered in Singapore must have at least one director who is a resident of the country. This is a regulation of the country’s Companies Act. If a foreigner incorporates a company in Singapore but does not have a local person who can act as a resident director of the new company, then the foreigner can “hire” a person to act as a director for a fee. Such a director is called a Nominee Director or ND. Sometimes the term Local/Resident Director is also used. The ND must be a citizen or Permanent Resident of Singapore and must have a permanent address that is located in Singapore. 

Foreigners / Non-Locals As Directors

As long as you have at least one locally resident director, you can have foreigners/non-locals as other directors of the company. At present, if you are on a Dependant’s Pass, it is not recommend that you become a director of a company, as a conservative view suggests that fulfilling the duties of a director may qualify as “work”, which necessitates approval from MOM.

Director Appointment Procedure

In general, directors are appointed through an ordinary resolution passed during a general meeting, however, the specific manner of appointment is dictated by the memorandum and articles of association of the company.

An ordinary resolution is a decision voted on by the shareholders of the company. Before an ordinary resolution can be passed, it must receive at least 50% of the votes cast at the general meeting. A company can pass an ordinary resolution through a physical meeting or by written means.

In most cases, before an ordinary resolution is passed, the board of directors has the power to appoint alternate or replacement directors who hold office until the next general meeting where they can be re-elected by the shareholders.

Before a director can be officially appointed, companies must first complete a series of documents and file an appointment of director notice with ACRA.

Documents Required To Appoint A Director

  • A declaration of consent to act as a director using form 45
  • The director’s disclosure of all other directorships or shareholdings
  • A signed board resolution that approves the appointment

Filing An Appointment Of Director With ACRA

For an incoming director who is considered an ordinary resident of Singapore, an existing director or the company secretary can file an appointment of director notice with ACRA online using BizFile. However, if the director is a foreign resident, the company is required to file the appointment of director through a registered corporate service provider.

Once the appointment has been filed with ACRA and the necessary fees are paid, the director is considered officially appointed.

Note- Feel free to contact us to handle any of your Singapore company matters, including appointment of a Singapore Company Director. We have our expertise in corporate company matters and would be happy to help make our customers happy!

Powers Of Director

According to the Company Act, directors have the authority to make all decisions on behalf of the company unless the matter requires an ordinary or special resolution decided upon by a shareholder vote.

Examples of company decisions that can be made solely by the directors:

  • Opening a bank account,
  • Borrowing or lending funds,
  • Investing company funds,
  • Selling company assets.

Examples of company decisions that require a shareholder vote:

  • Declaring Dividends,
  • Appointing and removing auditors,
  • Electing directors in place of retiring directors,
  • Alteration to clauses in the Constitution,
  • Reducing the share capital of the company,
  • Changing the company name.

Duties Of A Director

A company is bound by the decisions of its directors. To ensure that directors make decisions in the best interest of their company, Singapore common law and the Companies Act mandate that directors fulfill both statutory and fiduciary duties.

Statutory Duties Of A Director

  1. Keep Accounting records: Under section 199 of the Companies Act, a director must ensure that accounting records are kept that demonstrate the financial health of the company. The records must be held in a location where they can be inspected easily by other company directors.
  2. Maintain Annual Accounts: According to section 201 of the Companies Act, directors are required to submit financial statements to shareholders at least once a year at the company’s Annual General Meeting.
  3. Hold Required Meetings: Directors are required to hold the following meetings that may vary based on the size of the company and the company’s business structure.

  • Annual General Meetings (AGM): All companies are required to hold annual general meetings at least once a year.
  • Statutory Meetings: Directors of Public companies are required to hold a statutory meeting within the first three months after starting business.
  • Extraordinary Meeting: Directors are required to hold an Extraordinary General meeting if requested by the shareholders who combined own a minimum of 10% of the shares in the company
  • Appointment of a Company Secretary: It is the duty of the directors to appoint a company secretary within six months of starting business.
  • Appointment of an Auditor: The director of a company must appoint an auditor or a committee of auditors within the first three months after incorporation.
  • Payment of Dividends: The directors of the company are entrusted with paying dividends from only the profits the company makes.
  • Issues of Shares: A director must ensure that shares of the company can be issued only after approval from the shareholders. Any shares issued without the approval of shareholders are considered void.
  • Duty to Disclose: As a part of a director’s fiduciary duties, she is required to avoid conflicts of interest. However, if a conflict arises, a director is obligated to disclose such interests to the company. Below is a list of conflicts of interest examples that must be disclosed according to the Companies Act.
    • Interest in company transactions that create a conflict of interest: If a director stands to personally gain from a company transaction, the director must disclose his or her interest at a meeting of the directors that is recorded in the minutes.
    • Ownership of office property that creates a conflict of interest: In certain cases, a director can personally gain from owning office property that is also valuable to the company. If such a conflict arises, the director is required to disclose his or her ownership of the office property to the company at a director’s meeting, which must be recorded in the minutes.

    Fiduciary Duties Of A Director

    With ultimate decision-making power, a director has an ethical and legal obligation to promote the financial well-being of the company. In upholding the fiduciary duties a director must:

    1. Act in the best interest of the company: Directors are expected to give their undivided loyalty to the company. Therefore, all decisions should be made to benefit the interests of the company, while all personal and third party interest should be set aside.
    2. Avoid conflicts of interest: Directors should do their best possible to eliminate situations where their own personal interests are in conflict with the interests of the company. Examples of conflicts of interest include:

    • Entering a transaction where the director stands to personally benefit at the expense of the company
    • Diverting business from the company to a competing business
    • Serving as a director for a competing business
  • Exercise care, skill, and diligence: Directors will be measured by the experience that they bring to the company and are expected to run the company to the best of their skill.
  • Not misuse their power and information: Directors are expected to only use the power and information vested in them by the company to benefit the company.
  • Remuneration

    Directors are remunerated for their service as directors in the form of Director’s Fees. Director fees are proposed, and subsequently approved by the Members of the Company, in the AGM or EGM of the Company. If the Director is under employment contract, he or she is also entitled to salary and other employment income as stated in his/her employment contracts. The Governance Code provides that no director should be involved in setting his own remuneration. Instead, the company’s board should set up a Remuneration Committee with written terms of reference.

    Liabilities Of Directors

    A director who fails to meet their duties can face both civil and criminal penalties. Below is a non-exhaustive list of liabilities a director faces for each of their fiduciary and statutory duties.

    For a breach of any of the fiduciary duties mentioned above, a company can do any of the following in civil court:

    • Demand that the director pay for any damages incurred by the company
    • Demand the director return any profits earned while in breach
    • Declare any acts or decisions made by the director to be invalid

    Similarly, a director in breach of their fiduciary duties can face the following criminal liabilities:

    • A fine of up to S$5,000 or
    • Up to 1 year in prison
    1. Failure to Keep Accounting records: Under section 199 of the Companies Act, a director who fails to keep an accounting record faces a fine of up to S$2,000 and/or a prison sentence of up to 3 months.
    2. Failure to Maintain Annual Accounts: According to Section 201 of the Companies Act, any director who willfully fails to maintain the annual accounts of the company faces a fine of up to S$10,000 or a prison sentence of up to 2 years.
  • Failure to Hold Required Meetings: Under section 174 of the Companies Act, a director of a public company who fails to hold a statutory meeting faces a fine of up to S$1,000 and a default penalty. Similarly, under section 175, a director who fails to hold an annual general meeting faces a fine of up to S$5,000 and a default penalty.
  • Failure to Appoint an Auditor: According to section 205 of the Companies Act, a director who fails to appoint an auditor faces a fine of up to S$5,000.
  • Payment of Dividends from a source other than profits: According to section 403 of the Companies Act, a director who issues dividends using a source other than profits can face a fine of up to S$5,000 and a prison sentence of up to 12 months. The director will also be liable to repay any creditors for any debt used to pay the dividend.
  • Issue of Shares without shareholder approval: Under section 161 of the Companies Act, a director who issues shares without shareholder approval may be liable to compensate the company and shareholder to whom the shares were issued.
  • Duty to Disclose: Under section 156 of the Companies Act, a director who fails to disclose their interest in company transactions or ownership of office property will face a fine up to S$5,000.
  • Resignation

    In order to resign as a director, you first need to ensure that there is another locally resident director, so that you meet your obligations under the Companies Act. Then your next step is to alert your company secretary, who will prepare your resignation letter and a resolution for all the other directors to sign and file the changes with ACRA. After that change is filed, your company secretary will update all the necessary registers.


    In conclusion, it is not merely an honor to be elected to a board of directors. As explained intricately above, directors are subject to many arduous duties and responsibilities both at common law and by legislation. Thus, the position of director should only be considered by those with a wealth of experience in business and management, who are therefore able to run a company competently.

    Next Steps

    If you are looking for a Singapore Local Company Director or if you are willing to be one, you have reached the right place. We have a 40 year old rich legacy behind us, and we would be happy to help you with either of these matters. Contact us here to find more.

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