On 2nd July 2024, the Accounting Corporate Regulatory Authority (ACRA) Bill on regulatory and registry enhancements was passed, alongside the Corporate Services Providers (CSP) Bill (“CSP Bill”) and Companies and Limited Liability Partnerships (CLLP) Bill (“CLLP Bill”) on miscellaneous amendments.
Important Changes to the ACRA Act: Privacy Enhancement for Individuals
Currently, individuals in business entities are required to file their residential address with ACRA. This residential address is made available to the public, unless the individual submits an alternate address, which will replace the residential address in the public records. The option to file an alternate address comes at an additional cost.
New Regulations:
Individuals are required to submit both a residential address and a contact address at no cost. The contact address will be made publicly available, while the residential address will only be used if the individual cannot be reached at the contact address.
Implications for Individuals:
The amendments made to the ACRA Act will strengthen the confidentiality of individuals’ personal information by preventing their residential addresses from being exposed to the public.
Actions to stay compliant:
- If you are an individual in a business entity without an alternate address, you can file a contact address with ACRA from 26th August 2024 onwards at no additional costs.
- If the contact address is not filed by the time the amendments are taken into effect, the residential address will be listed as the contact address and made publicly available.
Changes in Nominee Arrangements and Company Registers
Nominee Arrangements
Currently, any person can act as a nominee director, and such service does not need to be arranged by a registered CSP.
New Regulations:
Under the new regime, persons are prohibited from acting as nominee directors unless the appointments are arranged by a registered CSP.
The registered CSP must ensure that any individual for whom they arrange to act as a nominee director is a fit and proper person to do so.
How this will impact you:
- Any company that needs to appoint a nominee director must approach a registered CSP.
- It is important that the nominee directorship is arranged by a trusted CSP as the company may be implicated if:
- Its appointed nominee director is involved in illicit activities such as money-laundering or terrorism activity, or
- The appointed CSP fails to perform or adequately carry out the fit-and-proper assessment on the nominee director (e.g. ensuring the prospective nominee director possesses the requisite competency, capacity, and integrity).
Disclosing Nominee Arrangements to ACRA
The first amendment to the CLLP Bill is the Disclosure of Nominee Arrangements. Under the current law, nominee directors and nominee shareholders are only required to disclose their particulars, nominee status, and particulars of their nominators to their companies. Companies are not required to share this information with ACRA.
Going forward, companies will be required to provide details of nominee arrangements, such as the particulars of nominee shareholders and nominee directors, to ACRA. This amendment aims to make nominee arrangements more transparent.
Maintaining Accurate Registers
The second amendment to the CLLP Bill pertains to maintaining accurate registers. Currently, companies and LLPs must maintain registers of their registrable controllers (beneficial owners). Companies must also maintain registers of their nominee directors and nominee shareholders.
The changes to the CLLP Bill are as follows:
- The maximum fine for register-related offences will be increased from $5,000 to $25,000.
- The CLLP Bill also makes it an offence, punishable by a fine of up to $25,000, for a person to provide false or misleading information about their registers to ACRA.
These amendments ensure that registers remain accurate, so that those controlling the companies behind the scenes are known to the authorities.
Key Considerations when choosing a Corporate Secretarial Service Provider:
Extensive experience in corporate governance and compliance
Service providers with significant experience in corporate governance and compliance can bring a wealth of experience and an understanding of best practices and potential pitfalls. In today’s increasingly regulated business environment, the ability to adeptly navigate the complexities of compliance obligations across various industries is not just important—it is essential. A proven track record indicates that they have successfully helped other businesses manage their governance challenges, instilling confidence in their ability to meet your needs.
Well-versed in local corporate regulations
A service provider who is well-versed in local corporate regulations ensures that your company remains compliant with all the statutory requirements. This knowledge is vital to avoiding legal issues, penalties, or reputational damage. You will be updated and kept informed about changes in laws and regulations that impact your business and its operations.
Comprehensive suite of services
Selecting a service provider that offers a comprehensive suite of services (i.e., company formation, compliance, advisory, and transactional support) means that you can have a one-stop solution for your business needs. This can lead to better coordination, reduced costs, and a more streamlined process. A holistic approach ensures that all aspects of your corporate requirements are adequately addressed.
Prioritises confidentiality and data protection
In today’s business environment, the confidentiality of sensitive corporate information is of utmost importance. A trusted service provider should have robust data protection measures in place, including secure systems for handling and storing data. This helps prevent data breaches and unauthorised access, safeguarding your entity’s reputation and assets. A commitment to confidentiality builds trust and confidence in the relationship between the client and the corporate service provider (CSP).
Being a registered filing agent with ACRA
Being a registered filing agent with ACRA indicates that the service provider is officially recognised and authorised to handle specific filing and compliance tasks for the client.
Overview of Regulatory Changes and their Rationale
The regulatory changes marks a crucial advancement in corporate governance and transparency. By enforcing new disclosure requirements and stringent compliance measures for corporate service providers, these amendments aim to enhance accountability while protecting individual privacy. The proactive approach fosters trust among stakeholders and contributes to a more ethical and resilient business environment, ultimately strengthening the integrity of the corporate landscape.
Contact us to get in touch with our professionals to see how CorpServe can help you.
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