A Guide to Preparing a Company Constitution in Singapore

In Singapore, every company is required to prepare a company constitution at the time of its incorporation. It is one of the statutory requirements every business owner must comply with. Otherwise, they won’t be able to set up and operate their business in the country. 

This article will discuss all you need to know about a company constitution in Singapore, including its contents and preparation. 

What is a Company Constitution in Singapore?

A company constitution is a legal document that governs the activities of a company. It outlines the roles and responsibilities of various members of the company, especially the directors and shareholders. It is also the first document that the company must submit to ACRA, the Registrar, which forms the basis for its establishment.

Before the Companies Act 2014, a company’s constitutional documents typically consisted of two documents – Memorandum of Association and Articles of Association (M&AA). The two papers have now been merged into a single document.

You must submit the company constitution to ACRA when incorporating your company. Note that the Registrar can refuse the proposed company’s constitution if:

• The company conducts business activities that would be deemed unlawful, or that would disturb the peace and public welfare in Singapore; or
• The registration is against the national security and interests of Singapore.

The company has to keep its constitution at its registered office. Each subscriber to the constitution must sign it and state the number of shares they have agreed to take.

Drafting a Company Constitution

Drafting a constitution that aligns with the Companies Act and the main business objectives is very important. The good news is that you don’t have to do it from scratch. Business owners can now refer to Model Constitution that has been provided in the Companies Regulations 2015. 

To make your life simpler, Biz Atom provides corporate secretarial services that can assist you in drafting, submitting, and changing your company constitution. 

Key Elements to Consider When Drafting a Company Constitution

When drafting a constitution, there are a few critical points to consider, such as:

•  Business objectives – These are the goals that you have set for your company. Therefore, you can always refer to the constitution whenever you need to explain to your company’s new members what the company wants to achieve.
• Decision-making structure – Making a clear structure to run your company will help ensure compliance with regulations and avoid potential conflicts among members.
• Specific rules & regulations – If you have a set of particular directions for your company that aligns with legal principles, make sure that you will add them to the constitution.
• Mandatory sections – Section 22 of the Companies Act mentions a few compulsory components that a company should include in their constitution (see below for more details).

Contents of a Company Constitution

The Companies Act does not specify what the company constitution should contain, except for mandatory sections. However, typically constitutions will have various rules regarding the company’s internal management, including shareholders’ rights and responsibilities, share transfer rules, appointment and powers of directors, and directors’ meetings.

The following are some of the mandatory sections of the company constitution according to the Companies Act:

The company’s name (name clause)

The company has to use its ACRA-approved name at all times when conducting its business as well as in official documents. The company must also follow specific guidelines when choosing its name.

Registered office clause

This the official location of the company where it keeps its records. A registered office may not be a PO box. 

Liability clause

The company must state the extent of the responsibilities of its members as part of the constitution. This clause explains the position of the members and their duties in the dissolution of the company.

Capital clause

This clause states the company’s share capital and the division of share capital into shares with a fixed value.

Subscriber clause

This clause should state the full names, addresses, and occupations of the subscribers, as well as the number of shares approved by each subscriber.

Objects clause

The objects clause in the constitution is an optional requirement. However, your constitution may impose certain restrictions on the capacity, rights, powers, and privileges.

Rules

This section covers the compliance of the company. It will govern the critical decisions the company makes daily. The rules clause usually covers areas such as shares, meetings, directors, financial statements, dividends, indemnity, etc.

Effects of the Constitution Adoption

A company constitution essentially creates a contract between the company and its members and amongst the members themselves, as stated in section 39 of the Companies Act. Furthermore, the section also mentions that:

• All money each member pays to the company under the constitution will be owed by them to the company.
• No member of the company shall be bound by changes made in the constitution after the date on which they became a member unless they have given their consent.

Changing the Constitution 

You can change your company constitution through a special resolution that requires more than 75% support from members. The changes will become part of the original constitution from the date of the special resolution. Next, your company must submit a notice of the resolution or any court order affecting the constitution within 14 days of the decision to ACRA. Then, ACRA will issue a note and certificate of establishment, which confirms constitutional changes.

If you wish to change your company’s objects, please refer to section 33 of the Companies Act.

Submitting a Constitution

You are required to submit a copy of the constitution when registering your business with ACRA. In Singapore, this process is commonly done by corporate services firms. However, if you need to know how the constitution submission works, the following are the details:

• First, log in to BizFile+ using your SingPass (if you are a Singaporean; for first-time business registration).
• Once you have registered your company, you will need a CorpPass to submit any document on Bizfile+.
• Next, your appointed officers will receive an email notification.
• Your company’s directors, shareholders, and secretary must endorse their consent via BizFile+ within 60 days after receiving the email notification.

Buying a Constitution from ACRA

ACRA offers PDF forms of regulatory documents business owners can adopt, including the Model Constitution. The certified copy has ACRA’s entity stamp and authentication number.

If you do not wish to create your own constitution, you can then buy one via BizFile+. Extract fees are as follows: 

• $11.00 – for forms without attachments;
• $26.00 – for forms with attachments; and 
• an additional $1 per page for certification.

Conclusion

All in all, the constitution of a company is the basis for the company to operate its business. Therefore, any company cannot function without one, and its business registration would not be approved. Should you require further assistance in drafting or adapting a custom constitution for your Singapore company, feel free to inquire about our services.

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