In order to promote openness and minimize the mismanagement of corporations, Singapore needs details of proprietors to be maintained in the form of a RORC. These details should be readily available to the ACRA whenever needed.
The new protocol conforms the state with international standards and bolsters its current efforts to become a reliable financial hub. While all businesses incorporated in this country keep open tabs with ACRA, their information can be sold to interested parties for a charge. Some of the details that can be released may include names and addresses of the entity's directors, stakeholders, and officers.
Earlier requirements for presenting information on RORC; 2017
On the last day of March 2017, the RORC was introduced as a private register. All business organizations including foreign & limited liability partnerships (LLC) that are in the state were asked to have an up-to-date RORC.
This RORC was kept as a private register at its designated office under the Singapore Relevant Entity. It would not be given to the public but would have to be easily accessible for inspection by the country's public authorities.
There were also instances where some entities were provided immunity against the RORC demands. These entities included the state's listed financial institutions and companies plus their fully-owned subdivisions.
The current requirements for lodging information on RORC: 2020
In 2020, Singapore declared the information on RORCs to be appealed with ACRA. The application of the new requirements was initially staged to begin in May but was later deferred to July. The reason for the changes in dates was attributed to the Covid-19 circumstances.
The new requirements demand all entities to submit their RORC details to ACRA unless excused by the authorities. The details may be sent through BizFile. All of this is done to magnify the country's reputation as a trustworthy financial center.
Just like in the previous case, the data that's presented on RORCs may still be unavailable to the general population. However, it will be posted to become available online. This will make it accessible to the country's public authorities.
Additionally, no more notifications in the form of requests will be sent to individuals/entities when public authorities choose to take a glimpse at their RORCs. The only thing companies should now concern themselves with, is to keep their RORCs up-to-date to prevent any confusion. Failure to fully comply, a fine up to the value of S$5,000 will be ruled.
Who is responsible for presenting the RORC data with the ACRA?
This responsibility falls in the hands of all Relevant Entities of the state. They are required to follow up and act on all the outlined steps of the process. They should identify their controllers and keep their information updated.
It's expected for all entities to prepare their RORCs and to ensure that their information is correct before submission. This will minimize the risk of miscommunications and penalties.
Usually, it won't be mandatory for entities to keep lodging their RORCs annually. They can however make updates (within 2 business days) if there happen to be any changes to the information.
As another option, an agent can be assigned to do all the processes, beginning from lodging to making updates on the RORC in the representation of a particular individual/entity.
The details that should be incorporated in the RORC.
The details that are needed in the process of lodging or making updates in the RORC are outlined below.
If the entities are individuals, then they should reveal details such as:
Country of origin;
The date when the person became a Relevant Entity that's registrable;
The date when the person stopped being a Relevant Entity that's registrable.
If the entities are corporations, they should present details such as:
The company name;
The company number provisioned by the Registrar (if available);
The legal form of the company;
The country, and statute through which the entity was established;
The name of the register of the state where the company was established;
The company's identification number obtained from the state where it was established;
Finally, you should also include the dates of the corporate's registration plus its termination as a Relevant Entity of Singapore.
In the event that there are mistakes in the details provided in the RORC, the entity can rectify the problem by lodging an error notification. This is usually an easy process, especially if it's a typing error.
Controllers: Which ones qualify in the RORC?
It's very important to note that the RORC needs a very precise and up-to-date divulgence of each and every controller in the country. In simple terms, a ‘Controller’ can be described as a person/entity that carries a certain level of authority over an 'interest' in a corporation (foreign or local)
In general, a ‘significant authority' in a corporation is:
a person/entity with the legal right to employ or fire directors that carry the majority of voting rights;
a person/entity that carries up to 25% or more of the voting rights on affairs that should only be determined by the company's members;
any arrangement where individuals/entities agree to add their percentage voting rights so that they surpass 25%;
an individual who is designated to hold over 25% of the voting rights, as a representative of another person or of an entity;
an individual/entity with the power to make sure that the organization adopts what they desire;
the complete executive/ veto rights over resolutions that are related to the company's operations;What's regarded as a corporation's (local or foreign company) ‘significant interest’ is:
a value that exceeds at least 25% shares in the business; or
voting shares that exceed 25% in the corporation.
The outlines below can help to shed more light with regards to an ‘interest in shares’:
Individuals (e.g. beneficiaries) who knows/believe that they have an interest under some trust holding shares, will be considered as having an interest in the particular shares;
Individuals who get into a contract for the purpose of buying shares will be considered as having an interest in the shares;
Individuals who are joint owners of some shares in the company will also be considered as having an interest in joint shares.
In the case that a body corporate shows interest in a particular share and a certain individual has the interest to control the body corporate, the individual will be regarded as having an interest in the share;
In the case that a body corporate shows interest in a particular share, and the directors (or body corporate), through either informal or formal means are obliged to perform as befits another individual, then that individual will be considered as having an interest in the particular share;
In the case that a body corporate shows interest in a particular share and a certain individual/associates have the legal right to control a voting power of over 20% within the body corporate, the individual/associates will be considered as having an interest in the share;
an individual who has any kind of control (implied, informal/formal) over a share's allocation (notwithstanding whether his/her power is can be restraint or not), that individual is considered to have an interest in the share.
These will not be considered as having an interest in any shares. In the event that the shares are subject to conditions of a certain discretionary trust, the conditions of that trust should be reviewed in order to decide who will account for controllers with regard to shares in the trust.
Which entities can be excluded from the RORC requirements?
The country's financial institutions and listed companies are excused from the demands of RORCs.
The entities that are referred to as (exempted) financial institutions are those that are approved and licensed/regulated under the monetary authority of the state.
Over to you
This course of action by Singapore is not uncommon. Countries like the UK have also taken such measures earlier before Singapore. Beginning in June of 2016, companies and partnerships in the UK were asked to reveal all individuals with 'significant control' and pass their information to the assigned authority.
Unlike in Singapore, the UK's registers can be publicly searched or accessed by the public at zero cost. This was welcomed by many organizations in the country who believe that this initiative promotes transparency and supports the state's objectives of minimizing illicit activities such as corruption. In addition, it allows easy identification of where sanctions need to be applied.
The state of Singapore has made it possible for the law enforcement and essential public agencies to have full access to the RORCs. This allows more efficient supervision of the various business activities in the state.
However, the privacy and confidentiality of the subject's wealth will not be compromised. The media (journalists) have not been granted access to any information about the RORCs.