Nominee Directors are appointed to represent the interests of another group or person. The ND does not have any role in operating the company but is appointed only to satisfy the statutory compliance requirements in Singapore.
According to the Singapore Companies Act, each Private Limited Company needs to have at least one (1) director who is a resident of Singapore. However, in cases where you do have a director in your company who is a resident of Singapore, you can be provided with a reliable director from Singapore as your nominee director.
Scopes and Roles of a Nominee Director
- It is clearly mentioned in the Companies Act that all the registered companies located in the city has to appoint a minimum of one director who is a resident of Singapore originally.
- This requirement can be fulfilled if your company does not have any director who is a resident of Singapore by opting for a Nominee Resident Director on an annual as well as short term basis.
- There are a number of responsibilities as well as obligations which are imposed on the Nominee Director by the Companies Act as well as the normal law.
- The company's major share of power is enjoyed by the Board of Directors. They are the ones to not only control the affairs of the company, but also answer to the company's shareholders.
- It is the directors who are indeed responsible for maintaining annual accounts and accounting records, statutory filings and books, and meetings of directors and shareholders. Most importantly, they have a sincere duty towards their company.
Required Number of Directors
The minimum number of directors required by a company in Singapore is one but it can go up to any number depending on the constitution of the company. Another important thing to note is that if a company has just one director then he's the sole director of the company as well.
But, there is one obligation in which the company still needs to have a minimum of two company officers. One is the director, while another is the company.
Who Can Qualify to Become a Company Director?
The minimum age a person needs to have to become a director in a company in Singapore is 18, since March 1, 2009. The only condition is that the person appointed should be fit mentally and physically to do all that a director needs to do.
There is no maximum age as such to be a director of a company, if it is private. However, in public companies, the maximum age limit is 70 years. The only exception is if they're reappointed again by the company after crossing the age of 70, they may work again so long as they are of sound mind and generally capable to maintain their position.
Who Cannot Qualify to Become a Company Director?
There are certain circumstances defined by the ACRA which disqualify a person from becoming a company director. They are:
- A criminal convicted for offences such as fraud and dishonesty.
- A bankrupt who is undischarged.
- If a court has made an order of disqualification against a person.
- Has a minimum of three High Court orders which compels compliance within a tenure of five years under the Companies Act.
- Convicted for at least three years for offending the Companies Act within five years time.
- The company winding up (dissolving) for reasons related to national security or national interest.
It is always the director's duty to inform the company which is concerned, which in turn should inform ACRA regarding the disqualification status.
Statutory Requirements to Become the Director of the Company
The director is responsible for two most importantly things. They are:
- Holding and convening the Annual General Meeting of the company.
- The subsequent filing of the annual returns of the company by specifying the due dates (usually within the month of AGM)
If the requirements aren't met, then the company has to either face a penalty or the directors may face legal actions.
Usually, when there is an AGM, directors are elected, auditors are fixed, dividends are declared, and remuneration is determined. The company's balance sheets and accounts are also determined. However, the private companies have the choice to or not to hold AGMs. But they should first consult with all the members of the company and pass a resolution for the same.
Other Duties of a Director in Singapore
- Engage with society
- Ensure corporate governance
- Adopt social and ethical responsible practices
- Practice corporate social responsibility
Thus, there are several responsibilities which a director has to fulfill. In Singapore it is a must for a company to have a director who is a resident of Singapore. If you cannot find a nominee director on your own, it is best to hire a local company to do the services for you to fulfill your statutory compliance requirements.