Once you have incorporated your company, it becomes a legal entity separate from the owners. This is when your board of directors must direct their attention to crucial issues as stipulated by the rule of law.
The table below shows some of the items that they need to address:
The first meeting by the BOD
The details of the conference are discussed as shown below
Common seal and Company stamp (if deemed necessary)
The BOD agree on the common seal during the first meeting
Printing and designing of shareholders’ certificates
The physical share certificates are mandatory for corporations
A bank account in an accredited financial institution
The bank account’s primary objective is to deposit the paid-up capital.
The Board of Directors First Meeting
The completion of the legal process of forming a new company marks the beginning of plans by the board of directors to have their first meeting. In most instances, the conference is convened a month after the incorporation. The list of items discussed by the directors in the first meeting is mentioned below:
- Chairperson: the board of directors appoints the chairperson
- Incorporation: the directors have to address the legal procedure of forming the company and draft a constitution.
- Seal: if the directors find it necessary to have a common seal it is adopted at this meeting
- Registered Office: the company’s address is confirmed as well as the expected working hours.
- Auditor: three months after the firm’s incorporation the directors are required to appoint the auditor
- Subscribers’ shares and share certificates: the shareholders at the initial stages of incorporation are issued with share certificates.
- Financial year-end: the dates of the fiscal year are fixed in the first meeting.
- First Directors: the appointment of the company’s directors
- Secretary: the firm’s secretary is appointed within the first six months of formation.
- Officers: the company’s top management officers such as the CEO and the general managers are appointed, and their salaries are determined
- Adoption of Agreement: ratifying any available contractual agreements made during incorporation of the firm.
- Bank Account: opening the company’s bank account and enlisting the signatories
- Shareholder Meetings: setting a date for the first Annual General Meeting (AGM)
- Director’s Meetings: setting a date for the next meeting by the board of directors.
- Declaration of Interest: it is drafted in instances where one of the directors or management officers has a shared interest with the company on a particular transaction or owns a property /asset that leads to a conflict of interest. If such is the case, the director must present disclosure in the form of a written notice to the BOD.
The Company Registers
The company Act stipulates that upon incorporation, the company must display certain information concerning their registers. The details of the records have to be available to all members and non-members without any charges whatsoever.
Registers of Members
Before the amendment of the Companies Act in 2014, companies had to ensure that they maintained a physical register of the members that had to be updated regularly. Since 3rd January 2016, ACRA embraced the digitalization that facilitated the electronic record of members. When the filing of the information on shareholders is done, it is treated as the point of entry or cessation from the company.
According to the s 196D of the Companies Act, companies incorporated before the 3rd January 2016 or those that had been converted to private companies had to maintain a physical register of members for approximately seven years. This period was mandatory and observed immediately after the last member dissolved their membership to the firm.
Private companies incorporated after ACRA started to maintain an electronic record of the members had to comply with the company’s Act. This implied that they, too, had to have a physical register of members because the new system only displayed information on the current shareholders. The record of historical information about the members is vital for fostering transparency and accountability.
On the other hand, public companies also had to have a physical record of the firm’s members that contained the following information:
- Personal details of the members such as the name, addresses. For a public company, each investor’s number is a vital piece of information.
- the date each individual joined the company and made entry to the register
- the date of cessation in the event one of the members chooses to leave the organization (within the past seven years)
- if the firm is a public limited company the allotment of shares to the shareholder is necessary
Register of Directors, Chief Executive Officers, Secretaries, and Auditors
ACRA maintains the list of Directors, CEOs, Secretaries, and Auditors. This register is updated through the BizFile+ system that incorporates all the changes. The s 196A of the Companies Act stipulates that all companies have the essential details on each individual, such as:
- Alternative name (for directors only);
- Home address (or contact address for auditors);
- Nationality (for directors and managers only);
- Alternate address, if any;
- Date of employment; and
- Date of resignation (if applicable
Apart from the above mentioned statutory requirements, the ACRA also retrieves the following information from the Directors, CEOs, Secretaries, and Auditors:
- Local contact number; and
- Email address.
Register of Directors’ and Chief Executive Officer’s Shareholdings
Under the Company’s Act, companies are required to maintain a record of the value of shares/interests of each director and CEO in the organization that contains the following information:
- The volume of shares in the firm
- (in the case of directors) any participatory interests of the director in a company or a related corporation in which he/she is an investor. The nature and extent of the interest is also vital;
- (in the case of CEOs) the liability of the CEO to the debt of company or of interest and the nature and extent of that interest;
- The stake of the director in the acquisition and disposal of shares related to the firm
- Any contractual agreements made by the company in which the director is one of the contracting parties and as such he/she is entitled to benefit from the terms and conditions of the contract
Register of Charges
The record of expenses is mandatory for companies under the Company Act and outlines the following:
- fees related to the issue of debenture;
- charges incurred by the firm’s uncalled share capital
- charges on the ownership of shares linked to a subsidiary company owned by the firm being incorporated;
- expenses associated with prove of evidence that an instrument executed by an individual, require registration as a bill of sale;
- costs on land including any interest but excluding any rent charges;
- charges on book debts of the company;
- floating charges on the undertaking or property of a company;
- charges on calls made but not paid;
- charges on ships or aircraft or any shares in ships or aircraft; and
- charges on goodwill, on a patent or a licence under a patent, on a trademark or a license to use a trademark, or on a copyright or a licence under the copyright or on a registered design or permission to use a registered design.
During incorporation, the company seal is usually discussed in the first meeting of the board of directors. The seal is considered the official signature that appears on every document, contract, certificates, and debentures of the company. This makes it one of the most important symbols used following the directives by the BOD or any other top leadership in the firm with the mandate to authorize its use. The application of the company’s seal is bound by the provisions mentioned in the constitution.
Under the constitution, the company seal is affixed following a consensus with the BOD on authorizing its application on a particular official document. The document is then signed by directors chosen by the board or a director and the company’s secretary. When it comes to hiring the text with the common seal, the constitution prohibits people from assuming dual capacities. This implies that a director cannot be appointed a secretary when affixing the company seal. The law also requires the company’s official name to appear in the common seal.
Documents Requiring Sealing
In Singapore, the documents that required the common seal include the following:
- deeds of gifts or contracts without consideration;
- leases where the lease-period exceeds seven years at a rack-rent;
- agency contracts where the agents have authority to bind the principals by the act (such as the power of attorneys);
- transfer of a ship or the shares in a ship; and
- contracts involving the transfer of real property.
You need to note that in Singapore, it is common for banking statements to have the company’s seal. Individuals conducting business on behalf of the firm must act within the provisions of the constitution.
Contracts and share certificates issued under the company’s name must have the common seal affixed on the document. In some instances, the firm is allowed by the law to have a common seal that authenticates its shares.
Conclusion - Post-incorporation Matters
If you have already incorporated your company and need guidance on post-incorporation procedures without a hitch, contact us today and we will take it up every step of the way.