Singapore Reduces Requirements For Deeds To Be Sealed – From 31 March 2017.

5 April, 2017

 

On 10 March 2017, Singapore's Parliament passed a number of amendments to the Companies Act that is to take effect in various tranches, the first of which takes effect on 31 March 2017 and involves the removal of the requirement for a Singapore company to have a company seal. 

 

Prior to 31 March 2017, Singapore companies seeking to execute a document as a deed are required to do so by way of affixing its common seal onto the deed. This is normally done by affixing a red sticker on the execution page of the deed and imprinting the company's seal on the red sticker (in the good old days red wax was used) along with the execution clause, "SIGNED, SEALED and DELIVERED". 

 

This amendment will dispense the need for Singapore-incorporated companies to use common seals in the execution of deeds, or any other documents previously required by law to be executed under the common seal (e.g. share certificates). 

 

Instead, a company may execute such documents simply by signature on behalf of the company by:

 

(a)  a director of the company and a secretary of the company;
(b)  at least two directors of the company; or
(c)  a director of the company in the presence of a witness who attests the signature.

 

This amendment adopts a similar approach to that of several other jurisdictions such as Australia, Hong Kong and the UK, which have similarly removed the requirement for the use of common seals. 

 

The amendment, however, does not modify the existing law on the requirement of delivery for deeds. According to the Summary of Feedback and Ministry of Finance / Accounting and Corporate Regulatory Authority's Responses, the "objective of the common seal reform is to allow companies and LLPs an alternative to affixing a seal and not to make any changes to existing law on delivery of deeds". 

 

As such, the common law principles regarding the requirement for deeds to be delivered still apply and any deed executed by a company must also be stated to have been "delivered" to be effective.

 

New execution clause

 

From 31 March 2017, Singapore companies may choose to adopt any of the following sample execution clauses, depending on their requirements, for the execution of deeds made on or after 31 March 2017:

Please note that this amendment only applies to Singapore-incorporated companies and there has been no change to the Companies Act's position on the execution of deeds by foreign corporations in Singapore.

 

 

 

For further information, please contact:act:

 

Daniel Song, Bird & Bird

daniel.song@twobirds.com