On 5 November 2025, the Parliament of Singapore passed the Corporate and Accounting Laws (Amendment) Act 2025. This legislative update is designed to strengthen corporate governance, enhance audit transparency, and bolster shareholder protection, further solidifying Singapore’s reputation as a world-class regulatory environment.
According to the latest announcement by the Accounting and Corporate Regulatory Authority (ACRA), key provisions of the Act will commence on 6 May 2026. This article outlines the four most significant changes that directors and companies must prepare for.
Key Legislative Amendments
1. Heavier Penalties for Breaches of Directors’ Duties
To reinforce the regulatory framework, the Act significantly increases the penalties for directors who breach their statutory duties (e.g., failing to act in the best interests of the company or failing to exercise reasonable diligence):
- Maximum Fine: Increased from S$5,000 to S$20,000.
- Criminal Sanctions: For serious offences, directors may face imprisonment of up to 12 months, in addition to or in lieu of the fine.
2. Expanded Criteria for Director Disqualification
In alignment with Singapore’s anti-money laundering (AML) regime, the Act expands the grounds for disqualifying individuals from holding directorships:
- Automatic Disqualification: Individuals convicted of money laundering offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 will be automatically disqualified.
- Compliance Obligation: Companies and Corporate Service Providers (CSPs) must conduct more rigorous screenings against the expanded list of disqualifying offences.
3. Two-Tier Approval Process for Share Buybacks
For selective off-market share purchases, the Act introduces a more robust safeguard for shareholder interests:
- Dual Authorization: Beyond the existing 75% approval from all shareholders (excluding the seller), companies must now obtain a separate 75% approval from shareholders within the affected class of shares (excluding the seller).
- Legal Validity: Failure to comply with this two-tier process may render the share buyback procedurally invalid.
4. Individual Identification in Audit Reports
To promote greater personal accountability and transparency within the auditing profession:
- Mandatory Disclosure: Audit reports must now identify the name of the individual Public Accountant primarily responsible for the audit engagement, moving away from the practice of signing off solely in the name of the accounting firm.
Compliance Recommendations
As these provisions become mandatory on 6 May 2026, we recommend that Boards of Directors take the following steps immediately:
- Duty Review: Ensure all major decisions are supported by adequate due diligence and documented in formal minutes.
- Eligibility Screening: Conduct a compliance review of current and prospective management to ensure they meet the updated directorship criteria.
- Procedural Updates: Adjust internal approval workflows for share buybacks to comply with the new two-tier statutory requirement.
References
- ACRA Official Announcement: Commencement of Key Changes under the Corporate and Accounting Laws (Amendment) Act 2025
- Corporate and Accounting Laws (Amendment) Act 2025 – ACRA Legislation Overview
