Singapore Company Law
Financial assistance to directors: s162 Improper use of information: s 157(2)
Financial assistance to director-related companies: s163
Directors remuneration and benefits: s168,169&172 Interested persons transactions: SGX Listing Manual
Section 156 disclosures: s156(1)&(5) Duty to retain discretions
Duty to avoid conflicts of interests
Duty to use powers for a proper purpose Duty to act in good faith in the interests of the company
Liability for fraudulent trading: s 340(1)
General law Duties
Loyalty and good faith
THE DUTIES
Care and diligence
Duty to act honestly and to use reasonable diligence: s 157(1)
Statutory Duties Duty to act with reasonable care and diligence
Administrative duties: Eg general disclosure: s 165; keeping accounting records: s 199; calling AGMs; s174 etc
Liability for wrongful / reckless trading: s 399(3)
1
Some things to think about…
• Are there others who owe similar duties? • To whom are the duties owed? • Who can enforce the duties?
– the link to the ‘proper plaintiff rule’ and derivative actions
2
A. Directors’ duties under s 157
• S 157(1) : director shall act honestly and use reasonable diligence in the discharge of the duties of his office • S157(2) : officer or agent of co shall not make improper use of information acquired by virtue of his position to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the co • S 157(4) : section is in addition to and not in derogation of other rules • S 157(3) : civil and criminal sanctions
3
B. Duty of care, skill and diligence
• S 157(1) and common law duty • Includes eg
– acting within Memorandum and Articles – performance of administrative requirements of the Act
• What is the standard expected?
4
B. Both an objective and subjective test…
• A director of a company must exercise the care, skill and diligence which would be exercised by a reasonably diligent person
Financial assistance to director-related companies: s163
Directors remuneration and benefits: s168,169&172 Interested persons transactions: SGX Listing Manual
Section 156 disclosures: s156(1)&(5) Duty to retain discretions
Duty to avoid conflicts of interests
Duty to use powers for a proper purpose Duty to act in good faith in the interests of the company
Liability for fraudulent trading: s 340(1)
General law Duties
Loyalty and good faith
THE DUTIES
Care and diligence
Duty to act honestly and to use reasonable diligence: s 157(1)
Statutory Duties Duty to act with reasonable care and diligence
Administrative duties: Eg general disclosure: s 165; keeping accounting records: s 199; calling AGMs; s174 etc
Liability for wrongful / reckless trading: s 399(3)
1
Some things to think about…
• Are there others who owe similar duties? • To whom are the duties owed? • Who can enforce the duties?
– the link to the ‘proper plaintiff rule’ and derivative actions
2
A. Directors’ duties under s 157
• S 157(1) : director shall act honestly and use reasonable diligence in the discharge of the duties of his office • S157(2) : officer or agent of co shall not make improper use of information acquired by virtue of his position to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the co • S 157(4) : section is in addition to and not in derogation of other rules • S 157(3) : civil and criminal sanctions
3
B. Duty of care, skill and diligence
• S 157(1) and common law duty • Includes eg
– acting within Memorandum and Articles – performance of administrative requirements of the Act
• What is the standard expected?
4
B. Both an objective and subjective test…
• A director of a company must exercise the care, skill and diligence which would be exercised by a reasonably diligent person