If a director of a Singapore company decides to resign, the company cannot stop it.
If other directors object to his resignation, it is not regarded as a valid reason, and it is still impossible to prevent the director from resigning.
The exception is if there is a precedent clause (that is, a memorandum, articles of association, or an existing contract between the company and the resigning director), and this clause can guarantee the validity of the resignation.
Company directors may be caused by several reasons, including:
- Poor health
- Not eligible
- There may be changes in the management leading to conflicts of interest among directors
The resignation of a director in Singapore will be considered valid if:
- The director resigns in accordance with the proper procedures stipulated in the company’s articles of association
- At least one director living in Singapore remains in the company.
After resignation, the company must evaluate its articles of association, and must also consider the impact on the company’s operations, as well as the following:
- The general resident director must be replaced by another general resident director.
- If the director is also the company secretary, then the company must appoint another company secretary within 6 months.
- If the director is a shareholder, the shares must be transferred to the remaining shareholders.
- Whether the director should take a vacation or stay in the post during the notice period after resignation.
- Whether shareholders, investors, employers, suppliers, and customers should be notified about the director’s resignation.
- Will resignation affect the company’s authorized signatory? If it is, it must be amended and all relevant parties notified
Why a Singapore company director’s resignation must be notified？
When a Singapore company director resigns, not only must a written notice be sent to the company’s registered address by registered mail, but also the Accounting and Corporate Regulatory Authority (ACRA) of the Singapore Companies Registry must be notified within 14 days.
ACRA will also make necessary changes to statutory records to reflect this change.
What to pay attention to when notifying ACRA of director resignation？
When submitting a notice to ACRA, you should be prepared to submit relevant documents, such as:
- In the case of disqualification, bankruptcy declaration or court order;
- If it is a resignation, please send a notice and confirmation of the resignation of the director to the board of directors.
ACRA can be notified online through BizFile.
What will happen if ACRA is not notified？
If the suspension notice is not issued to ACRA, this may constitute an offence of non-disclosure under Section 165 of the Company Act.
According to this article, a director or chief executive can be personally liable and can be fined up to S$15,000 or imprisoned for 3 years.
The suspension will not take effect until the notice is issued, which means that the directors will still be responsible for managing the company.
If the suspension notice is still not issued to ACRA, the director or chief executive officer may be fined S$1,000 per day.