In one of our earlier blog posts, we highlighted the importance for company directors to take their statutory duties seriously. Here’s the blog post if you wish to have a quick recap.
Disqualification of Directors – What it means for you?
Other than ensuring your Company meets the statutory requirements, as a Director of your Company, you should exercise reasonable care and take adequate steps to meet and discharge your obligations under the law and prevent your Company of being misused for money laundering and terrorism financing.
Your Role as a Director
Apart from being subject to a broad range of statutory obligations under the Companies Act, Chapter 50 in Singapore, you also have the following roles:
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Exercise fiduciary duties to act in the best interests of your Company;
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Understand the business affairs of your Company;
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Perform reasonable due diligence on corporate activities and banking transactions to prevent your Company and its funds from being misused;
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Ensure your Company maintains accurate and up-to-date accounting records and financial statements; and
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Identify the registrable controllers/beneficial owners of your Company.
Your Responsibility Always
We need to highlight to you that as a Director of your Company, you cannot absolve responsibility by denying involvement, claiming ignorance or that you have delegated to the professionals or third parties with respect to your Company's transactions and/or activities.
If your Company is misused for criminal purposes e.g. money laundering or terrorism financing, you may be subject to criminal investigations and possible prosecution.
If your Company fails to file its annual returns, you could be disqualified from acting as a director, if you are convicted of three or more annual return filing offences or had three or more companies under your directorship struck off the register by the Accounting and Corporate Regulatory Authority ("ACRA") within a period of five years.
Your Duty to File Suspicious Transaction Reports
In the course of performing your duties as a Director, if you have reasonable grounds to suspect that a property or financial transaction may be linked, directly or indirectly, to criminal conduct or terrorist activity, you should promptly file a Suspicious Transaction Report (“STR”) to the Suspicious Transactions Reporting Office ("STRO") via SONAR. Failing to file STR may be construed as abetting the criminal offence.
The size of the property does not matter. The quantum of the financial transaction does not matter too. You file a STR as long as you have a reason to suspect that it is linked to criminal conduct or terrorist activity, be it directly or indirectly. The STRO will decide on the course of action to take upon the receipt of the STR. Every STR helps in the early detection of crime, money laundering and terrorism financing activities.
Remember This
ACRA can take enforcement action against you as a Director through imposition of fines and/or disqualification from acting as director for a period of five years from the date of conviction.
Hence, always remember that your role as a Director of your Company is very important and should not be taken lightly.
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