Chandra Mohan [Managing Director]
Founder / Senior Audit Partner / FCA [Singapore] / FCCA / CPA [Aust] / MBA
Published 23 April 2026

The Clock Is Ticking – Less Than Two Weeks to Go

If you are a director of a Singapore company – whether you are hands-on, a nominee, or a shareholder-director of a small private company – this blog is your wake-up call.

On 6 May 2026, selected provisions of the Corporate and Accounting Laws (Amendment) Act 2025 will come into force. These are not minor administrative tweaks. They represent a fundamental shift in how ACRA holds directors personally accountable for corporate governance, financial reporting compliance, and anti-money laundering obligations.

The penalties are heavier. The disqualification net is wider. The transparency requirements are stricter. And ignorance is no longer an affordable excuse.

At SC Mohan PAC, we work closely with SME directors every day. We know that many of you depend on your auditors, accountants, and company secretaries to keep your company compliant. That reliance is understandable – but here is the critical truth that every director must internalise:

You can delegate tasks, but you cannot delegate responsibility. Under the Companies Act, directors remain personally liable – regardless of who prepares your financial statements or advises you on compliance.

To fully appreciate why these amendments matter, it helps to understand how we got here. The story of Singapore’s corporate regulatory evolution over the past two decades is one of deliberate, progressive tightening – and the 2025 amendments are its most significant chapter yet.

How We Got Here: Singapore’s Corporate Regulatory Evolution

Singapore’s corporate landscape did not arrive at this point overnight. The regulatory framework has evolved through distinct phases over the past two decades, each responding to the needs and challenges of its time. Understanding this journey helps directors appreciate that the 2025 amendments are not a sudden crackdown – they are the logical culmination of a deliberate regulatory evolution.

Phase 1: The Era of Liberalisation (Early to Mid-2000s) – Opening the Door to Business

In the early 2000s, Singapore embarked on an ambitious programme to position itself as one of the world’s most business-friendly jurisdictions. The government recognised that attracting investment and entrepreneurship required reducing barriers to company formation.

Several landmark reforms were introduced during this period:

The Formation of ACRA and Its Dual Mandate

ACRA was established on 1 April 2004 through the merger of the former Registry of Companies and Businesses (RCB) and the Public Accountants’ Board (PAB). With ACRA’s formation came the launch of the BizFile electronic filing system, which transformed company incorporation from a paper-heavy, time-consuming process into one that could be completed online, often within the same day.

A point that many directors overlook is that ACRA’s formation was not simply about making incorporation easier. The merger of the RCB with the PAB under one authority gave ACRA a dual regulatory mandate from day one – overseeing both companies and the public accountants who audit them.

This dual mandate has significant implications that every director should understand. It means that the same authority that registers your company, receives your annual filings, and enforces director compliance also regulates, inspects, and disciplines the auditors who sign off on your financial statements.

The Practice Monitoring Programme (PMP) – Auditors Under ACRA’s Scrutiny

Central to this mandate is the Practice Monitoring Programme (PMP) – a programme of regular inspections of public accountants and audit firms to assess the quality of their audit work and compliance with Singapore Standards on Auditing. The PMP was originally administered by ICPAS (the Institute of Certified Public Accountants of Singapore, now known as the Institute of Singapore Chartered Accountants, or ISCA) from 2000 to 2002. When ACRA was formed on 1 April 2004 – absorbing the PAB’s regulatory functions – the PMP was brought under ACRA’s direct control, covering all public accountants from the outset.

The programme has continued to strengthen over the years. The Public Accountants Oversight Committee (PAOC), operating under ACRA, conducts PMP inspections and has the authority to issue orders against auditors found to have deficiencies – including requiring peer reviews, imposing conditions on practice, or in serious cases, suspending or cancelling an auditor’s registration. Most recently, with effect from 1 July 2023, ACRA’s inspection powers were further expanded to include quality control reviews of accounting entities (i.e., audit firms themselves), ensuring that firms – not just individual auditors – deliver consistent, high-quality audit work.

For directors, this means two things. First, the auditors you engage are already subject to rigorous regulatory oversight by ACRA through the PMP – and have been since 2004. When an auditor signs off on your company’s financial statements, that individual operates under ACRA’s scrutiny.

Second – and this is the point many directors miss – ACRA expects the same level of accountability from directors as it does from auditors. If ACRA holds auditors to high standards through inspections, orders, and potential deregistration, it stands to reason that directors who approve and sign those same financial statements should hold themselves to equally high standards.

Opening Up Incorporation: From Professionals to Directors

Prior to ACRA’s formation, incorporating a company in Singapore required the involvement of qualified professionals – lawyers, public accountants, or qualified company secretaries. The process was formal, paper-based, and carried professional fees that added to the cost of starting a business.

The formation of ACRA in 2004 and the launch of BizFile changed this fundamentally. For the first time, directors themselves could incorporate companies directly through the electronic filing system, without the mandatory involvement of a professional intermediary. This was a landmark shift – it put the power of company formation directly into the hands of entrepreneurs and business owners.

Over the following years, a professional ecosystem developed around company formation and corporate compliance. Registered Filing Agents (RFAs) were introduced under the ACRA Act, allowing regulated individuals and firms to file documents with ACRA on behalf of companies.

Most significantly, recognising the critical role these service providers play – particularly as gatekeepers in Singapore’s anti-money laundering framework – Parliament passed the Corporate Service Providers Act 2024 on 2 July 2024. The CSP Act came into effect on 9 June 2025, establishing a standalone regulatory framework requiring all Corporate Service Providers to be registered with ACRA, maintain at least one Registered Qualified Individual (RQI), and undergo fit and proper assessments. Notably, Public Accounting Entities are deemed registered as CSPs, reflecting the natural overlap between accounting and corporate service functions.

With the CSP Act, ACRA’s mandate expanded to four regulatory pillars – business registration, financial reporting, public accountants, and corporate service providers. This means that today, virtually every participant in Singapore’s corporate ecosystem – from the directors who run companies, to the auditors who audit them, to the service providers who assist them – operates under ACRA’s regulatory oversight.

The evolution from a closed, professionals-only system to a comprehensive, regulated ecosystem reflects Singapore’s consistent approach: make it easy to do business, but ensure that every participant in the system is properly regulated and accountable.

The No-Par-Value Regime and Removal of Stamp Duties on Share Capital

One of the most significant reforms was the introduction of the no-par-value regime for shares under the Companies (Amendment) Act 2005, which commenced on 30 January 2006.Prior to this reform, every company was required under the Companies Act to have an authorised share capital stated in its Memorandum and Articles of Association, with a minimum authorised share capital of $100,000. Shares had a par value (also known as nominal value), and stamp duty was payable on the Memorandum of Association based on the amount of authorised share capital.

The stamp duty was calculated on a tiered basis:

Authorised Share Capital	Stamp Duty Payable
First $100,000 (minimum required)	$1,200
$200,000	$1,600
$300,000	$2,000
Each additional $100,000	Additional $400

 

This meant that even before a company commenced business, its founders incurred a mandatory upfront cost simply to establish the company’s share capital structure. A company with the minimum authorised capital of $100,000 paid $1,200 in stamp duty alone – a meaningful sum for small business owners.

The move to the no-par-value regime eliminated the concept of authorised share capital and par value entirely. Companies were no longer required to state an authorised capital, and shares no longer had a nominal value. Share capital was now referred to simply as “Issued Capital” in ACRA’s BizFile records. Consequently, the stamp duty on share capital in the Memorandum of Association was abolished.

The Companies (Amendment) Act 2005 went further than just removing par value. It also introduced the concept of treasury shares – allowing companies to hold bought-back shares for later disposal or cancellation. It simplified capital reduction procedures, enabling companies to reduce share capital without court approval. And it introduced a framework for voluntary amalgamations, allowing companies to merge without the need for a court order. Financial assistance provisions were also liberalised, permitting companies to provide financial assistance up to an aggregate amount of 10% of paid-up capital and reserves.

These changes collectively made Singapore one of the fastest, cheapest, and easiest places in the world to start a company – a reputation that attracted thousands of new incorporations annually and cemented Singapore’s position as a leading global business hub.

Phase 2: The AML/CFT Tightening (Mid-2010s) – Closing the Gaps

As Singapore’s corporate ecosystem grew rapidly, so did the risks. The ease of incorporation that attracted legitimate businesses also created opportunities for misuse. Globally, regulatory bodies were intensifying their focus on anti-money laundering (AML) and countering the financing of terrorism (CFT), and Singapore was not immune to these concerns.

The FATF Mutual Evaluation

A pivotal moment came with the Financial Action Task Force (FATF) Mutual Evaluation of Singapore. The FATF assessment examined Singapore’s AML/CFT framework and identified areas for improvement, particularly around transparency of beneficial ownership and the regulation of corporate service providers.

In response, Singapore undertook significant legislative reforms:

The Companies (Amendment) Act 2017 introduced the requirement for companies to maintain Registers of Registrable Controllers – effectively requiring companies to identify and record their beneficial owners. This was a direct response to global concerns about the misuse of corporate structures to hide the true ownership of assets and funds.

Enhanced Regulation of Service Providers – ACRA strengthened the regulatory framework for those providing corporate services, introducing stricter requirements, enhanced Know Your Customer (KYC) obligations, and ongoing compliance monitoring. The regulatory tightening of this period laid the groundwork for what would eventually become the Corporate Service Providers Act 2024 – the standalone legislation that brought CSPs under a comprehensive regulatory framework with effect from 9 June 2025, completing ACRA’s evolution into a four-pillar regulator.

These reforms sent a clear signal: openness would no longer come at the expense of integrity. The corporate framework was maturing, and with it came higher expectations for all participants – directors, shareholders, service providers, and professional advisors alike..

Phase 3: The Clean-Up (Early 2020s) – Removing the Dead Wood

By the early 2020s, decades of easy incorporation had resulted in a large number of dormant and non-compliant companies on ACRA’s register. Many of these companies had ceased operations but were never formally wound up. Others had simply stopped filing annual returns, leaving their records outdated and their compliance status unknown.

ACRA took decisive action.

Through a series of strike-off exercises under Section 344 of the Companies Act, ACRA systematically identified and removed companies that had failed to file annual returns or were no longer carrying on business. Thousands of companies were struck off during this period. These exercises were not merely administrative housekeeping – they were a deliberate effort to clean up Singapore’s corporate register and ensure that only active, compliant companies remained.

ACRA also stepped up enforcement actions against directors who failed to comply with filing obligations. Directors of companies that were struck off faced potential disqualification, and those who had failed to fulfil their statutory duties were put on notice.

The message was becoming increasingly clear: maintaining a company on Singapore’s register carries real obligations – and ACRA was prepared to act against those who ignored them.

Phase 4: The New Era of Accountability (2025 to 2026) – The Standard Is Now Non-Negotiable

And so we arrive at 6 May 2026.The Corporate and Accounting Laws (Amendment) Act 2025 represents the most significant tightening of Singapore’s corporate regulatory framework in recent years. It is the culmination of everything that came before:

• Singapore opened the door to business in the 2000s
• It identified the risks that came with that openness in the 2010s
• It cleaned up the register in the early 2020s
• And now, it is raising the bar for every company and every director that remains

The message from ACRA is unmistakable: if you want the privilege of operating a company in Singapore, you must run it properly. The era of light-touch regulation is over. Singapore’s reputation as a clean, transparent, and well-regulated business jurisdiction is a national asset – and ACRA intends to protect it.

For SME directors, this means the days of treating compliance as an afterthought, delegating everything to your accountant without understanding what you are signing, or assuming that being a small company means being below the regulatory radar – those days are over.

Why This Matters: The Bigger Picture

Before we dive into the specific amendments, let us address a question we hear frequently from SME directors:

“My company is small. Do these rules really apply to me?”

Yes. Unequivocally, yes.

The Companies Act applies to all Singapore-incorporated companies – whether your revenue is $500,000 or $50 million, whether your financial statements are audited or unaudited, and whether you have one director or ten. ACRA does not differentiate based on company size when it comes to director duties and penalties.

Singapore’s standing as a trusted global business hub depends on every company – large or small – maintaining proper governance and compliance standards. When even one company falls short, it chips away at the collective reputation that benefits all businesses operating here.

This is precisely why understanding the regulatory landscape is not optional – it is a fiduciary obligation that comes with the privilege of holding a directorship in Singapore.

The Four Key Amendments: An Overview

The Corporate and Accounting Laws (Amendment) Act 2025 introduces four key changes that every director must understand. Here is a summary – we will explore each in detail in Part 2 of this series.

	Amendment	Key Change	Impact Level
1	Heavier Penalties for Directors	Maximum fines increased from $5,000 to $20,000. Imprisonment of up to 12 months now possible for serious offences. Both fines and imprisonment can be imposed simultaneously	🔴 Critical
2	Expanded Director Disqualification	Directors convicted of money laundering offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (CDSA) will be automatically disqualified from holding director positions	🔴 Critical
3	Two-Tier Share Buyback Approval	Selective share buybacks now require two levels of 75% shareholder approval — from all shareholders AND from shareholders of the same class of shares being bought back	🟡 Important
4	Individual Auditor Identification	Audit reports must now identify by name the public accountant primarily responsible for the audit engagement – no longer just the firm name	🟡 Important

 

The penalty comparison alone should command your attention:

Aspect	Before 6 May 2026	From 6 May 2026
Maximum Fine	$5,000	$20,000
Imprisonment	Not applicable for most breaches	Up to 12 months
Combined Penalties	Fines only in most cases	Both fines AND imprisonment
Increase Factor	–	4x increase in fines

 

A $5,000 fine was often treated as a minor cost of doing business. A $20,000 fine per offence – potentially combined with imprisonment – transforms non-compliance from an inconvenience into a career-ending and life-altering risk. And these penalties apply per breach, meaning multiple failures can compound rapidly.

Coming Up in Part 2: The Detail That Matters

We have covered the why – the two decades of regulatory evolution that led to these amendments. We have introduced the what – the four key changes taking effect on 6 May 2026.

But understanding the context is only half the battle. What do these changes mean for you specifically? What should you actually do about them?

In Part 2 of this series, we will cover:

✅ Deep dive into each amendment – detailed analysis of all four changes with practical implications for SME directors

✅ Understanding FRS, FRSSE, and the Companies Act – the essential knowledge every director must have about financial reporting standards and their legal obligations

✅ The unaudited financial statements gap – why directors of non-audited companies may be the most vulnerable of all, including the full history of audit exemption thresholds from 2003 to today and ACRA’s current review of the exemption framework

✅ A practical cost comparison – proving that investing in qualified professional support costs a fraction of what you will pay in fines, legal fees, and reputational damage

✅ Your compliance action plan – a step-by-step guide with timelines that every director should follow

Don’t miss Part 2 – your compliance depends on it.

👉 Read Part 2: The Detail That Matters – Your Compliance Action Plan

Contact Us

If you have immediate questions about how the 6 May 2026 amendments affect you or your company, don’t wait for Part 2 – reach out to us now.

SC Mohan PAC

📞 +65 9144 1840
📧 [email protected] | [email protected]
🌐 www.scmohan.com.sg

 

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