Introduction
Singapore’s corporate regulatory landscape is undergoing one of its most significant transformations in recent years. The Corporate and Accounting Laws (Amendment) Act 2025, passed by Parliament on 5 November 2025, introduces sweeping changes to the Companies Act 1967, the Limited Liability Partnerships Act, the Variable Capital Companies Act, and several other pieces of legislation. With most provisions targeted to commence from April 2026, the time for company directors, shareholders, and corporate officers to understand and prepare for these changes is now.
Whether you are a company director navigating enhanced duties, a shareholder concerned about your rights, or a business owner considering share buybacks, these amendments will affect how you operate your Singapore company. In this article, we break down the key changes under the Corporate and Accounting Laws (Amendment) Act 2025 and explain what they mean for your business in practical terms.
Background: Why Were These Amendments Introduced?
The amendments were developed following an extensive public consultation conducted by the Ministry of Finance (MOF) and the Accounting and Corporate Regulatory Authority (ACRA). The legislative overhaul addresses five key objectives:
- Preventing the misuse of companies for unlawful purposes, including money laundering and terrorism financing.
- Safeguarding shareholders’ interests, particularly minority shareholders in companies with complex shareholding structures.
- Strengthening the regulatory framework for companies and corporate service providers.
- Reducing regulatory burden for companies, especially smaller ones with simpler structures.
- Enhancing the regulatory regime for public accountants to maintain Singapore’s reputation as a trusted financial hub.
The Act amends several pieces of legislation, including the Companies Act 1967, the Accounting and Corporate Regulatory Authority Act 2004, the Accountants Act 2004, the Insolvency, Restructuring and Dissolution Act 2018, the Limited Liability Partnerships Act 2005, the Limited Partnerships Act 2008, and the Variable Capital Companies Act 2018.
Key Change #1: Increased Penalties for Directors Under Section 157
One of the most impactful changes for company directors relates to Section 157 of the Companies Act, which governs directors’ duties to act honestly, exercise reasonable diligence, and refrain from misusing company information or exploiting their position for personal gain.
Under the amended Act, the maximum fine for a breach of Section 157 has been significantly increased to S$20,000, with the possibility of imprisonment for up to 12 months, or both. This represents a substantial increase from the previous penalties and serves as a stronger deterrent against directorial misconduct.
For directors — including nominee directors — this is a critical development. The enhanced penalties underscore that every director, regardless of whether they are actively involved in day-to-day management, must fulfil their statutory duties diligently. As we have discussed in our article on appointing your first directors in Singapore, the responsibilities that come with directorship are serious legal obligations, and these amendments reinforce that point emphatically.
What This Means in Practice
Directors should take immediate steps to ensure they are fulfilling their duties properly. This includes attending board meetings, reviewing financial statements before approval, declaring conflicts of interest, and ensuring the company is meeting all its statutory filing obligations. Companies that rely heavily on nominee directors should also review those arrangements to ensure the nominee is genuinely able to discharge their responsibilities — not merely serving as a figurehead.
Key Change #2: New Two-Tier Approval for Selective Off-Market Share Buybacks
The amendments introduce a more structured approval framework for selective off-market share buybacks. Under the current law, companies that wish to buy back shares from specific shareholders (rather than through a general offer to all shareholders) need to comply with certain approval requirements. The new Act creates a clearer two-tier approval system:
- Tier 1: A special resolution passed by the general body of shareholders (requiring 75% approval), similar to the existing requirement.
- Tier 2 (newly introduced): Separate approval by at least 75% of the shareholders within the affected class of shares — excluding those shareholders whose shares are being purchased.
This is a significant safeguard for minority shareholders. Previously, there was a risk that majority shareholders could push through a selective buyback that disproportionately benefited certain parties. The new Tier 2 requirement ensures that the remaining shareholders in the affected class have a genuine say in whether the buyback should proceed.
Practical Implications for Companies with Multiple Share Classes
Companies that have issued different classes of shares — for instance, ordinary shares and preference shares — will need to pay particular attention to these new requirements. If your company is considering a share buyback, it is advisable to work with your company secretary early in the process to ensure the correct approval procedures are followed. The company secretary’s role in facilitating proper shareholder meetings and resolutions has never been more important.
Key Change #3: Codification of Share Class Rights Variation (Section 74)
Related to the share buyback changes, the Act also amends Section 74 of the Companies Act to clarify the approval threshold for varying or abrogating the rights attached to different classes of shares. The current provision was silent on the specific proportion of shareholders whose consent is required.
Under the amended Section 74, a variation or abrogation of class rights must be approved by at least 75% of the class-rights holders, unless the company’s constitution states otherwise. This codification removes ambiguity and provides companies and their shareholders with greater legal certainty when dealing with changes to share class rights.
For companies that have adopted a constitution that already specifies the threshold for varying class rights, the constitution will prevail. However, companies whose constitutions are silent on this matter will now be subject to the statutory 75% threshold.
Key Change #4: Sole Directors May Now Serve as Company Secretary
In a welcome move to reduce the regulatory burden on smaller companies, the amendments allow a sole director to also serve as the company secretary. Under the existing law, the roles of director and company secretary must generally be held by different individuals. This requirement often created an additional cost and administrative burden for small businesses — particularly single-director companies that were required to appoint a separate company secretary.
However, this relaxation comes with an important condition: the sole director who takes on the role of company secretary must demonstrate the requisite knowledge and experience to fulfil the secretary’s responsibilities effectively. As our articles on the advisory roles of a corporate secretary explain, the company secretary’s duties extend well beyond administrative filing — they encompass corporate governance advisory, compliance oversight, and shareholder communication.
Should You Rely on This Exemption?
While this change is beneficial for reducing costs, sole directors should carefully consider whether they have the time and expertise to handle both roles. The duties of a company secretary include ensuring timely filing of annual returns, maintaining statutory registers, preparing board resolutions, and advising on compliance matters. For many directors, engaging a professional corporate secretary remains the safer and more efficient option.
Key Change #5: Stronger Powers Against Misuse of Companies
The amendments significantly strengthen ACRA’s ability to prevent the misuse of corporate structures for unlawful purposes. Under the current law, the Registrar of Companies may refuse to register a company if it is likely to be used for an unlawful purpose or for purposes prejudicial to public peace, welfare, or good order in Singapore.
However, the law previously did not explicitly require the courts or the Registrar to deny applications for the restoration of struck-off companies, foreign companies, or limited liability partnerships on similar grounds. The amended Act now expressly specifies these grounds for refusal, closing a potential loophole that could have been exploited by bad actors seeking to revive dormant or struck-off entities for illegitimate purposes.
This is particularly relevant in the context of Singapore’s ongoing efforts to combat money laundering and terrorism financing — a matter that gained heightened public attention following several high-profile cases in recent years. For more information on the striking-off process and what it means for your company, refer to our guide on striking off a company.
Key Change #6: Enhanced Information-Sharing for Audit Oversight
The Act also broadens ACRA’s powers to share information obtained through its audit oversight functions with foreign audit regulators. This change supports international regulatory cooperation and aligns Singapore’s framework with global best practices for audit quality supervision.
For companies subject to statutory audits, this means that the quality and integrity of their financial reporting may be subject to greater scrutiny — not only domestically but potentially internationally as well. Directors should ensure that their company’s financial reporting responsibilities are being met to the highest standards, particularly if the company has cross-border operations or foreign shareholders.
Key Change #7: Increased Regulatory Scrutiny and Enforcement
Beyond the specific legislative provisions, one of the most notable trends accompanying the April 2026 commencement is an increase in regulatory scrutiny. ACRA and other Singapore authorities are placing greater emphasis on enforcement, leveraging data analytics and cross-agency collaboration to identify irregularities. Late filings, inaccurate financial statements, nominee director misuse, and dormant companies with unexplained transactions are all being flagged more easily.
Companies should take this as a signal to review their compliance posture. As we have explained in our guide on the annual return financial reporting standards, staying on top of your filing obligations is not merely a matter of avoiding penalties — it reflects well on your company’s governance and credibility with stakeholders, banks, and potential investors.
How Should Your Company Prepare?
With the April 2026 commencement now upon us, companies should take the following practical steps:
- Review your board governance practices. Ensure that all directors understand their enhanced obligations under the amended Section 157, and that proper procedures are in place for board meetings, conflict-of-interest declarations, and financial statement reviews.
- Audit your share structure. If your company has multiple classes of shares, review your constitution to understand how the new share class rights and selective buyback provisions apply to you.
- Update your constitution if necessary. Consider whether your company’s constitution needs to be amended to address the new provisions, particularly regarding share class rights variation thresholds.
- Assess your company secretary arrangement. If you are a sole director considering taking on the company secretary role, honestly evaluate whether you have the knowledge and capacity to do so effectively.
- Ensure your compliance filings are up to date. With ACRA stepping up enforcement, now is the time to clear any outstanding filings and ensure your statutory registers are accurate and current.
- Consult a professional corporate services provider. Given the breadth of these changes, engaging experienced professionals can help you navigate the transition smoothly and avoid costly missteps.
Conclusion
The Corporate and Accounting Laws (Amendment) Act 2025 represents a landmark update to Singapore’s corporate governance framework. From higher penalties for directors to stronger shareholder protections, new share buyback approval requirements, and enhanced powers against the misuse of corporate structures, these changes touch virtually every aspect of running a Singapore company.
The message from regulators is clear: corporate governance matters, and the bar is being raised. For directors and business owners, the key takeaway is that proactive compliance is far better than reactive scrambling after an enforcement action.
At Raffles Corporate Services, we help companies of all sizes navigate Singapore’s evolving regulatory landscape. Whether you need assistance reviewing your board governance practices, updating your company constitution, managing your annual filings, or understanding how these new amendments affect your specific situation, our team is here to help. Contact us today to ensure your company is fully prepared for the changes ahead.
— The Editorial Team, Raffles Corporate Services