The Company Constitution
Before 3 January 2016, the Company Constitution consist of two separate documents – the Memorandum of Association and Articles of Association (M&AA). The constitution is a legal document that regulates the relationship of the company with its members, and among its members.
As part of the amendment of the Companies Act in 2014, the two documents have since been merged into a single document called the Company Constitution.
The Company Constitution is now a mandatory document for all newly incorporated companies in Singapore on or after 3 January 2016. Under the Constitution, it states the name of the company, the nature of business activities, the liabilities of its members and the total amount of share capital issued in the company.
A Model Constitution set out in the Companies Regulations is available on ACRA for business owners to reference.
Contents of a Company Constitution
Under this clause, the name of the company, as approved by the company registrar. should be listed. The company will use this name as the company’s legal identity and documentation.
Registered Office Clause
This clause specifies the location of the registered business address of the company. All records such as the company registers, minutes and etc. will be kept at the registered office.
This section states the obligations of the members in case the company is dissolved.
If the company is limited by shares, a statement that the liability of its members is limited;
If the company is limited by guarantee, a statement that its members are liable to contribute up to a certain specified amount if the company is closed down;
If the company is an unlimited company, a statement that the liability of its members is unlimited;
If the company is an unlimited company or a company limited by guarantee, the number of its members at the time of its application for registration
This clause contains the total amount of share capital in the company and the division of the share capital into shares of fixed value.
Includes the full names, residential addresses and occupations of all the members of the company.
This states the business activities the company wish to carry out. It can also include the activities which the company cannot participate in.
Rules and Regulations
Other terms that may also be included in a Company Constitution are:
Issue, allotment and transfer of shares
The manner of calling and holding for meetings such as Annual General Meeting and Extraordinary General Meeting
Appointment and resignation of directors
Directors’ duties and powers
Declaration and distribution of dividends
Register and Submit a Company Constitution
The Companies Act Section 19 states that a person desiring the incorporation of a company shall submit to the Registrar the constitution of the proposed company. ACRA can reject the registration of a proposed company’s constitution should the company’s business activities is considered unlawful or will disrupt the public peace and welfare.
The constitution of the company must be signed by its members and to be kept at its registered office which would be accessible for review at the registered office.
Amending the Company Constitution
A company can amend its constitution by passing a special resolution in an Extraordinary General Meeting and would require more than 75% consent from the board. The changes will be part of the original constitution from the date of passing of the special resolution.
The company must first submit a notice of resolution or any court order that affects the constitution within 14 days of such resolution of order to ACRA. ACRA will then issue a notice which stands as a confirmation of the amendment to the constitution.
The Company Constitution set out as a foundation and a prerequisite for the company to start its business. Drafting a Company Constitution from scratch can be burdensome for business owner. For peace of mind, engage a professional Corporate Secretary to manage the registration and drafting of the company constitution for you!