How to Remove a Company Director in Singapore
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Are you planning to remove a director from your Singapore company and looking for a legal way to do it? If you are, please stay on this page. This guide will provide necessary information regarding a company director’s removal, including the procedure and the disqualification notice you should make with the Singapore authority.
Some common reasons why a company wants to remove its director
A company may wish to remove its director before for particular reasons, such as:
- Poor performance;
- Violation of the director’s duties;
- Poor management leads to substandard company performance; or
- Personal involvement in corporate scandals.
Do note that not everyone in the company has the right to remove a director. A director can only be removed by shareholders. To be more specific, there are different ways to remove a company director, depending on whether you are a private limited company or a public company.
How to remove a company director if you are a private limited company
According to the Companies Act, a company’s shareholders may remove a director by ordinary resolution if there is no contrary provision in the company’s constitution. However, for the company director’s removal to be decided, there should be more than 50% of the total votes in favor of the removal.
The company’s shareholders must then give a 14-day written notice, although this requirement may be waived if more than 95% of the total votes have approved the company director’s removal.
Alternatively, the company’s constitution may set out some requirements or conditions. For example, a company director should be removed through a special resolution with more than 75% of the total votes in favor of the removal. The company’s constitution may also include a clause governing the removal of a director in specific circumstances (e.g., in the event of a terminal illness).
How to remove a company director if you are a public company
In accordance with the Companies Act, a director in a public company can be removed through an ordinary resolution with more than 50% of the total votes in favor of the removal, unless it is varied by the company’s constitution or an agreement between the director and the company.
Furthermore, before shareholders call a general meeting to initiate the process of removing a director, special notice must be sent to other shareholders and the director concerned. The notice must be given at least 28 days before the meeting, but if this is not practicable, 14 days will do.
You may also want to read this related article:
Resignation of a Company Director
A director of a company may choose to resign from their position voluntarily. In Singapore, the resignation of a director is legal provided that:
- The resignation procedure is in accordance with the company constitution.
- The company must have at least one remaining director who is domiciled in Singapore.
Notifying ACRA of Resignation or Disqualification of a Company Director
Upon the resignation or disqualification of a director, the company must submit a notice of termination to the Accounting and Corporate Regulatory Authority (ACRA). The notice must be lodged within 14 days of the date of cessation.
When lodging a notice with ACRA, be prepared to submit relevant documents such as:
- In case of disqualification, bankruptcy declaration, or court order if applicable;
- In the event of resignation, a notice of director’s resignation and acknowledgment from the board of directors.
There are situations where the director must notify ACRA of their resignation or disqualification:
- When the director has reason to believe that the company will not lodge a notice; or
- When the director is aware that there are no other officers in the company to lodge a notice. For example, when the company secretary has resigned, and the other remaining directors are disqualified.
What is next after notifying ACRA?
After lodging a notice with ACRA, your company secretary will have to check the status of the notification after 1 – 3 working days via:
- BizFile+ – under “Transaction Status Enquiry”
- Email – you will receive the outcome by email if you have provided your email address to ACRA
Furthermore, ACRA may contact your former director or other relevant parties to verify the resignation or disqualification.
Please note that ACRA may take longer to respond if a more detailed investigation is required.
Failure to notify ACRA
The company and any company officer who does not report the resignation or disqualification of their respective directors may:
- be fined up to S$5,000; or
- be responsible for default punishment if the violation continues after conviction.
Until the notification is lodged, the cessation will not take effect. This means that the director will still be responsible for managing the company.
To avoid any consequences of non-compliance with ACRA, it is best to seek professional advice or consult an experienced ACRA-registered filing agent.
Read another related article:
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