Disqualification of Directors – What it means for you?


As a deterrence to persistent offenders, the Accounting and Regulatory Authority (“ACRA”) disqualifies directors who have been convicted of three or more filing related offences under the Companies Act within a period of five years, or had three or more companies struck off the register by ACRA within a period of five years. Once disqualified, they will not be allowed to act as a company director or take part in the management of any local or foreign company for five years, effective from the day after the date of the third conviction or the date the third company is struck off.

While disqualified individuals can apply to the High Court for leave to continue to act as directors, 5 directors,who were disqualified due to having 3 or more of their companies struck off by ACRA, had their applications dismissed by the High Court in 2018 and 2019. They were ordered to pay costs ranging between $6,000 and $12,000 to the Government, which had opposed the applications. 4 other disqualified directors have withdrawn their applications.

To protect public interest and enable investors and interested stakeholders to conduct due diligence on a company, ACRA publishes on its public register, directors who have been disqualified from acting as directors. The disqualified status of a director will be displayed in the business profile and directors profile reports of the company. Members of the public can purchase the business profile and directors profile reports from ACRA’s online business registration and filing portal for a small fee.

Company directors are reminded to take their statutory duties seriously including complying with statutory requirements such as convening and holding annual general meetings and the timely filing of annual returns seriously. The public can alert ACRA if they have reason to suspect that breaches to the Companies Act have taken place.


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