新加坡公司法-英文

CHAPTER 16      SINGAPORE COMPANY LAW   Section 1          Introduction   Section 2          Incorporation and its Consequences   Section 3          Corporate Governance   Section 4          Enforcement of Corporate Rights   Section 5          Shareholder Remedies   Section 6          Shares   Section 7          Debentures and Charges   Section 8          Companies in Distress   Section 9          Winding up     SECTION 1     INTRODUCTION   16.1.1     In Singapore, companies are principally governed by the Companies Act (Cap 50, 1994 Rev Ed) (hereinafter “the Act”). It should be noted though that specific types of companies may, in addition to the Companies Act, be regulated by other statutes. For example, insurance companies and banks are also regulated by the Insurance Act (Cap 142, 1994 Rev Ed) and the Banking Act (Cap 20, 1994 Rev Ed) respectively. Limited liability partnerships, which despite their name are companies, are governed by the Limited Liability Partnership Act (Act 5 of 2005). Certain provisions in other statutes such as the Securities and Futures Act (Cap 289, 1994 Rev Ed) are also relevant to companies.   16.1.2     It should also be noted that the statutory provisions governing companies are supplemented by the common law.   Return to the top SECTION 2     INCORPORATION AND ITS CONSEQUENCES   Obligation to Incorporate   16.2.1     Under section 17(3) of the Act, a business organization that has more than 20 members must be incorporated as a company. However, this requirement does not apply to a partnership of persons carrying on a profession that is formed in pursuance of some other written law in Singapore (section 17(3) of the Act). Thus members of the legal profession who are governed by the Legal Profession Act (Cap 161, 1994 Rev Ed) may establish partnerships of more than 20 partners.   Registration of a Company   16.2.2     As a general rule, any person may, upon lodgment of the requisite documents and payment of the prescribed fee, register a company in Singapore. The mandatory documents to be lodged under section 19(1) of the Act are the memorandum and articles of association. The memorandum and articles of association are the constitutional documents of the company. Under section 22(1) of the Act, the memorandum of association must prescribe the name of the company, the amount of its share capital (if any) and whether the liability of the members of the company is limited or unlimited. The articles of association are the regulations of the company and contain provisions relating to how the company is to be governed. Where the memorandum and the articles are in conflict, the former will prevail.   16.2.3     Once the memorandum of the company is registered, the Registrar will issue a notice of incorporation stating that the company is, from the date specified in the notice, incorporated and the type of company it is, i.e. whether it is a limited or unlimited company and where applicable that it is a private company – see section 19(4) of the Act.   Effects of Incorporation   16.2.4     Section 19(5) of the Act sets out the general effect of incorporation which is that the company is a body corporate with all such powers as flow from such an entity. The company may sue and be sued in its own name, it has perpetual succession in that it can survive indefinitely until it is wound up, it may hold land, and the liability of its members is limited in the event the company is wound up.   16.2.5     Cases have established that as a body corporate a company has a distinct personality that is recognized by law. In other words, a company has an existence and identity separate from that of its members – see Salomon v A Salomon & Co Ltd [1897] AC 22; Lee v Lee’s Air Farming Ltd [1961] AC 12. The most important consequence of this is that the debts and obligations incurred by the company are its own and its members do not share the company’s liabilities. Creditors of the company may only look to the company for payment of debts owed to them by the company. If the company is insolvent and cannot pay its debts, the creditors will have to bear the loss however solvent the company’s individual members may be. All that the members of a company are obliged to do is to contribute the amount that remains unpaid on the shares that the members have subscribed. This obligation is owed to the company, not the creditors of the company. As such, if the shares were issued on a fully paid basis, or have already been fully paid, the members have no further liability to the company. Thus, when speaking of limited liability it is important to note that what is meant is not that the company’s liability is limited but that the members’ liability to contribute to the company is limited to the share capital for which the members have agreed to subscribe.   ‘Lifting the Veil’ of Incorporation   16.2.6      While an incorporated company has a personality separate from that of its members, there are circumstances when the courts will ignore such separate personality and treat the company and its members (or officers) as one for limited purposes. Thus, for example, there may be circumstances when the courts will hold the members of a company liable for debts incurred by the company. When the courts do so, it is said that the veil of incorporation is lifted or pierced. Generally, the cases of veil lifting fall into two categories: by statute and at common law.   Statutory Exceptions to the Separate Personality Doctrine   16.2.7     It is open to Parliament to limit the effects of incorporation by a suitably worded statutory provision. One of the more important statutory limitations on the separate personality doctrine arises under sections 339(3) and 340(2) of the Act. The combined effect of those provisions is that, where debts are contracted without any reasonable or probable expectation that the company would be able to pay the debts, any officer of the company who was a party to the contracting of such debts is guilty of an offence and may, after conviction, be made personally liable by the court for the payment of the whole or any part of such debts.   16.2.8     Another important exception is found in section 340(1) of the Act. Where it appears in the course of the winding up of a company that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the court may declare that any person who was knowingly a party to the carrying on of the business in such a manner shall be personally liable for all or any of the debts or liabilities of the company as the court may direct.   16.2.9     A third important exception arises where dividends are paid even though there are no available profits out of which to pay such dividends – see section 403(2)(b) of the Act. Since dividends may only be paid where there are profits so as not to unduly prejudice creditors of the company, a director or manager of a company who wilfully pays or permits the payment of a dividend in the absence of profits will be liable to the creditors of the company for the amount of the debts due to them to the extent by which the dividends exceed the available profits.   Common Law Exceptions to the Separate Personality Doctrine   16.2.10    Persons incorporate companies for various reasons but, undoubtedly, one of the reasons is to insulate themselves from personal liability should the business fail. Accordingly, the mere fact that members or officers of a company utilize the corporate vehicle to shield themselves from personal liability is no -reason to disregard the company’s separate personality – see Adams v Cape Industries plc [1990] 1 Ch 433. However, the position is different where the members or officers of a company abuse the corporate form for improper means.   16.2.11    Thus, if an individual already has existing legal obligations, but attempts to use the corporate vehicle to evade such obligations, the courts will ignore the company’s separate personality. For example, it has been held that a person who has agreed to sell a house cannot avoid his contractual obligations by transferring the house to a company. Both he and the company were ordered to specifically perform the contract even though the company was not a party to the contract – see Jones v Lipman [1962] 1 WLR 832.   16.2.12    Similarly, if a company is used to perpetrate a fraudulent act, the courts will treat the company and those behind it as one and the same. Thus, if a company has been incorporated to defraud innocent investors, the court may hold the promoter of the company liable even though the promoter and company are separate persons – see Re Darby [1911] 1 KB 95.   Return to the top SECTION 3     CORPORATE GOVERNANCE   Separation of Ownership and Management   16.3.1     Section 157A of the Act states that the business of the company shall be managed by or under the direction of the directors. The directors may exercise all the powers of a company except any power that the Act or the memorandum and articles of the company require the company to exercise in general meeting. This reflects one of the features of company law, namely, that it can facilitate a separation of ownership and management. The members or shareholders who own the company need not necessarily be involved in its management as directors. While in some companies, particularly small ones, the members of the company may also be involved in its management - either as directors or in some other executive capacity - in many other companies, the members are not involved in management. Instead, such companies are managed by boards of directors in which many of the directors are not members of the company. Even when the directors are members of the company, their shareholdings in the company may be relatively small. It should also be noted that, in such companies, even this management by the board may often be notional as the majority of the members of the board may not be full-time directors but are non-executive directors. In such companies, the day-to-day management of the company will be in the hands of the senior executive officers of the company, some of whom may be board members. The role of boards in such companies is then to exercise a general oversight but not to be involved in executive matters.   Statutory Duties   16.3.2     Under common law, directors are regarded as fiduciaries and therefore owe fiduciary duties to their companies. At the same time, the Act also prescribes certain duties on directors which mirror their general duties under the common law. One important provision is section 157(1) of the Act which prescribes that a director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office. Section 157(2) of the Act goes on to state that an officer or agent of a company shall not make improper use of any information acquired by virtue of his position as an officer or agent of the company to gain, directly or indirectly, an advantage for himself or for any other person, or to cause detriment to the company.   16.3.3     Section 157 of the Act does not purport to be an exhaustive statement of the law relating to the duties that directors owe to their companies. In this regard, section 157(4) provides that the section is in addition to and not in derogation, of any other rule of law relating to the duty or liability of directors or officers of a company. The effect of section 157 is to render those duties mandatory while the duties at common law are capable of exclusion by agreement between the company and its directors, assuming that the company has made such a decision independently of the interested directors. Under section 157(3) of the Act, a breach of sections 157(1) and 157(2) renders the officer or agent liable to the company for any profit made or any damage suffered by the company as a result of the breach. At the same time, a breach of these sections is an offence, and the officer or agent shall be liable upon conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding one year.   Duty at Common Law to Act in the Best Interests of the Company   16.3.4     In the exercise of their duties, directors must act bona fide in what they consider is in the best interests of the company. When the acts of directors are challenged, the courts do not substitute their own judgment for that of the directors – see ECRC Land Pte Ltd v Wing On Ho Christopher [2004] 1 SLR 105; Vita Health Laboratories Pte Ltd v Pang Seng Meng [2004] 4 SLR 162. All that the courts are concerned about is whether the directors have acted honestly in what they (and not the courts) considered to be in the company’s best interests. Of course, if the decision is one that no reasonable board would have arrived at, this casts serious doubt on the bona fides of the directors.   16.3.5     It should be noted though that, while the directors’ overriding duty is to the company, section 159 of the Act provides that in exercising their powers, directors are entitled to have regard to the interests of the company’s employees generally, as well as the interests of its members. That directors may have regard to the interests of its members is also the position at common law since the members collectively do in a sense comprise the company notwithstanding the company’s separate personality – see Peters American Delicacy Co Ltd v Heath (1939) 61 CLR 457; Greenhalgh v Arderne Cinemas Ltd [1951] Ch 286. The entitlement to have regard to the interests of employees is also a sensible one since advancing the interests of employees will often be in the best interests of the company.   16.3.6     There are also circumstances where directors must have regard to the interests of creditors. Generally speaking, creditors have no interest in the company’s assets. A creditor who wishes to enforce the debt owing to him from the company must bring a claim against the company. In the absence of an interest in the company’s assets, the directors of a company do not have to take the interests of creditors into account when making corporate decisions. However, when a company is unable to pay its debts, and is thereby effectively insolvent, the interests of its creditors must be taken into account. This is because creditors of an insolvent company are entitled to appoint a liquidator to get in the assets of the company to which the creditors have a prior claim before the members of the company. Accordingly, in such circumstances, directors must ensure that the affairs of the company are properly administered and that its property is not dissipated or exploited to the prejudice of the creditors – see Winkworth v Edward Baron Development Co Ltd [1987] 1 All ER 114.   Duty at Common Law to Avoid Conflicts of Interest   16.3.7     As a fiduciary, a duty of loyalty is imposed on a director vis-à-vis the company. As a result, a director is obliged not to place himself in a position where his duty to the company may conflict with his own interests – see Chew Kong Huat v Ricwil (Singapore) Pte Ltd [2000] 1 SLR 385; Kumagai-Zenecon Construction Pte Ltd v Low Hua Kin [2000] 2 SLR 501. One particular application of this duty is that a director is not permitted, without the fully informed consent of the company, to make a profit in connection with the director’s position. Thus, if the director comes across a business opportunity while discharging his role as a director, he cannot personally take advantage of such an opportunity unless the company has, with full knowledge of the facts, permitted him to do so. This permission may be given by the rest of the board (assuming the other board members giving approval do not stand to benefit personally) or by the members in general meeting.   Duty at Common Law to Act for Proper Purposes   16.3.8     The management of a company is generally vested in the board of directors and the board will often have other more specific powers such as the power to issue shares under section 161 of the Act, provided that the directors have obtained a specific or general mandate to do so. Such powers must be exercised for proper purposes. Even if directors have acted in good faith in what they believe is in the best interests of the company, they may have exercised certain powers in an improper manner. For example, it has been held that, where the power to issue shares was used to facilitate a takeover bid for a company, that was not a proper exercise of such a power even though the directors felt that they were acting in the company’s best interests – see Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821.   Effect of Breach of Fiduciary Duties   16.3.9     If a director places his own interests above those of the company, the director will be liable for any loss caused to the company. If the director has profited from his position without the informed consent of the company, the director may have to account for the profits to the company. Where the director has contracted with the company, e.g. the director has sold an asset to the company, the company may be able to avoid the contract if the contract with the company was entered into in breach of the director’s fiduciary obligations to the company. Where a third party has entered into a contract with the company knowing that the directors of the company have acted improperly, the company may also be able to avoid the contract vis-à-vis the third party.   Return to the top SECTION 4     ENFORCEMENT OF CORPORATE RIGHTS   The ‘Proper Plaintiff’ Rule   16.4.1     As a company has a personality separate from that of its members, a member of the company cannot sue to enforce rights that belong to the company. This is known as the ‘proper plaintiff’ rule, namely, that the company is the proper plaintiff in respect of any rights that it has – see Foss v Harbottle (1843) 2 Hare 461; Ng Heng Liat v Kiyue Co Ltd [2003] 4 SLR 218. Where a company has rights to be enforced, or is being sued, the usual body that is empowered to decide whether the company should either bring an action or defend the claim is the board of directors in whom the power of management is usually vested.   Derivative Actions   16.4.2     Notwithstanding the proper plaintiff rule, there may be occasions where a member of the company is entitled to bring an action on behalf of the company. Where a member does this, the action is referred to as a derivative action as the right is derived from the company. The member is not suing to enforce any rights that belong to him personally. In such actions, the company is included as a nominal defendant so that any decision of the court will bind the company as well.   16.4.3     A member may bring a derivative action in respect of a wrong done to the company where the wrongdoer is the person who has control of the company and is in a position, or has used such control, to prevent a proper action from being brought against him. The wrong done may have arisen because the person in control of the company has appropriated the company’s assets for himself, or it may consist of an abuse of the powers vested in the wrongdoers, e.g. where the majority shareholders attempt to use their voting power in an illegitimate manner. In such a situation, the wrongdoers would use their control of the company to prevent a claim from being brought against themselves. Accordingly, a member will be allowed to institute a derivative action against the wrongdoers if the member is bringing the claim bona fide for the benefit of the company in circumstances where there is no other remedy available. If the action is being brought for an ulterior motive or in bad faith, the court is entitled to take that into account in determining if it is in the best interests of the company that the action should proceed.   Statutory Derivative Action   16