Permanent company virtual meetings permitted in Singapore

Under an amendment to the 1967 Companies Act (CA), made through the Companies, Business Trusts and Other Bodies (Miscellaneous Amendments) Bill, companies can now hold fully virtual and hybrid company meetings and board meetings held virtually are no longer prohibited. Companies are also now required to accept proxy instructions given electronically rather than leaving this to be stipulated in the company’s constitution.

The bill also amends the multiple-proxy regime, which has been introduced to replace the former ‘one proxy’ rule in the case of schemes of arrangement. By doing so, beneficial shareholders whose shares are held by relevant intermediaries will have the right to attend the Scheme of Arrangement (SOA) meeting, ensuring that representation at the SOA meeting and all other corporate meetings is handled consistently where the intermediary is allowed to appoint multiple representatives.

Relevant intermediaries include banks providing nominee services, those providing custodian services and holding a licence for capital market services, and the Central Provident Fund Board (CPFB) acting as an intermediary.

One other amendment is that shares held by persons connected with the offeror are now excluded when calculating the 90% threshold for compulsory acquisition under section 215 of the CA. This amendment aims to provide greater protection to minority shareholders.

The maximum punishment for offences pertaining to financial statements not giving a true and fair view and complying with accounting standards has been increased. Without intent to defraud, the fine is up to S$250,000, and if there is intent to defraud, a maximum fine of S$250,000 and up to three years imprisonment may apply.

Mayumi Soh of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, said: “In an era of growing technological advancements, the world is rapidly transforming into a digital landscape. These amendments keep the CA relevant and competitive while providing companies with the opportunity to embrace the benefits of virtual meetings, fostering convenience, flexibility, and efficiency in corporate interactions.”

The rules relating to virtual company meetings will come into effect on 1 July 2023, while the remaining amendments will come into effect on a date that the Minister appoints by notification in the Gazette. 

During the pandemic, Singapore introduced temporary legislation to provide greater clarity to enable companies, business trusts and variable capital companies to hold meetings virtually. This legislation is due to lapse on 1 July, which would have meant these entities could only hold meetings online if expressly permitted under their written laws or governing instruments.