What New Company Directors Need to Know About Their Legal Responsibilities

Becoming a company director in Singapore is an exciting opportunity, brimming with potential for growth and success. However, it also brings a range of legal responsibilities crucial for maintaining the company’s compliance and standing. Here at Inctro, we’ve prepared a guide to help new company directors understand their legal obligations and ensure they fulfil their roles promptly and effectively.

Duties and Responsibilities

First and foremost, directors must fully comprehend the duties and responsibilities that come with their roles. Under the Singapore Companies Act, directors are entrusted with the power to manage the company’s business and affairs. They must act honestly and diligently, always prioritizing the company’s interests above their own.

Fiduciary Duties

Fiduciary duties refer to the legal obligation to act in the company’s best interest. These include:

• Duty of Care: Directors must perform their tasks responsibly, skillfully, and diligently.
• Duty to Avoid Conflict of Interest: Directors should avoid situations where personal interests may conflict with the company’s interests.
• Duty Not to Misuse Company’s Property: Directors should not misuse company property or information for personal gain.

Statutory Duties

In addition to the fiduciary duties, directors also have statutory duties under Singapore’s Companies Act. These include:

• Preparing accurate financial statements: Directors are responsible for preparing accurate and fair financial statements that comply with the Accounting Standards.
• Holding Annual General Meetings (AGM): Companies must hold an AGM within a stipulated time frame.
• Filing annual returns: Directors must ensure annual returns are filed with ACRA on time.
• Disclosure of interests: Directors should disclose their interests in transactions or shareholdings.

Penalties for Breach of Duties

Directors should be aware that failure to meet these duties and responsibilities can lead to severe penalties, including fines, disqualification, and sometimes imprisonment. It’s, therefore, crucial to understand and fulfil your obligations as a company director.

Seeking Professional Advice

Navigating the complexities of Singapore’s corporate governance landscape can be challenging, especially for new directors. At Inctro, we offer professional company secretarial services to help guide you through these complexities. Our team of experienced chartered secretaries will provide you with the advice and support you need to ensure your company remains compliant.

Taking on the director role is a significant responsibility that can be as rewarding as challenging. By understanding and fulfilling your legal obligations, you can steer your company towards a future of success and growth. 

Let Inctro be your trusted partner in this journey.

For more information about our services or to schedule a consultation, don’t hesitate to contact us today. We look forward to helping you navigate the exciting world of corporate leadership in Singapore.