Every company incorporated in Singapore must have a constitution. It is the company’s rulebook: the document that governs how the company is run, how decisions are made, and the relationship between the company, its directors and its shareholders. Since 2016, the old memorandum and articles of association have been replaced by a single document simply called the constitution. Many owners adopt a standard version at incorporation and never look at it again, until a dispute or a transaction makes its exact wording suddenly very important.
This guide explains what the constitution is, what it should contain, and when and how to change it, so you understand the document that quietly governs your company.
What is the constitution?
The constitution is a legally binding document that, under the Companies Act 1967, takes effect as a contract between the company and each member, and between the members themselves. Every company must have one to be incorporated. It sets out the internal rules that the Act does not fix, and it works alongside the Act rather than replacing it. Where the constitution is silent, the default provisions of the Act apply.
The model constitution
To make incorporation simple, the Government prescribes a model constitution that companies can adopt in whole or in part. Many private companies limited by shares adopt the model constitution with minor amendments. It is a sensible starting point, but it is generic: it will not reflect a shareholders’ agreement, special share rights, or bespoke governance arrangements. If your ownership is anything other than a single shareholder, it is worth reviewing whether the model constitution actually fits your situation. You can review the framework on ACRA, and the underlying law in the Companies Act 1967.
What a good constitution should cover
Beyond the basics, pay attention to the clauses that decide real disputes: the rights attaching to each class of shares (dividends, voting, return of capital); how shares are transferred, including pre-emption rights that give existing shareholders first refusal; how directors are appointed and removed; how board and general meetings are called and what quorum they need; how decisions are made and what majorities apply; and how deadlocks are handled. These are the provisions people reach for when relationships sour. Keeping them consistent with your minute books and resolutions avoids conflicting records.
Entrenching provisions
The Companies Act allows a constitution to contain entrenching provisions, clauses that are harder to change than by the usual special resolution, for example by requiring a higher majority or the consent of specified members. Entrenchment can protect a minority shareholder or a founder from having a key protection stripped out by a bare 75% majority. It is a powerful tool, but it must be drafted carefully, because it can also make the company rigid.
How to amend the constitution
A constitution is generally altered by special resolution, requiring at least 75% of the votes of members entitled to vote, unless an entrenching provision imposes a stricter requirement. The amended constitution, together with the resolution, is lodged with ACRA. Common triggers for an amendment include bringing in an investor with special rights, creating a new class of shares, or aligning the constitution with a newly signed shareholders’ agreement. Understanding the difference between ordinary and special resolutions is essential here.
Frequently asked questions
Is the constitution the same as a shareholders’ agreement?
No. The constitution is a public, statutory document binding the company and all members. A shareholders’ agreement is a private contract between some or all shareholders. The two should be consistent; where they conflict, careful drafting decides which prevails.
Can I just use the model constitution?
You can, and many single-shareholder companies do. But the model constitution is generic. If you have multiple shareholders, investors, or special arrangements, a tailored constitution avoids gaps and disputes.
How do I change my constitution?
Usually by special resolution (at least 75%), then lodging the amended constitution with ACRA. Entrenching provisions may require an even higher threshold.
– The Editorial Team, Raffles Corporate Services