On 6 May 2026 the first tranche of the Corporate and Accounting Laws (Amendment) Act 2025 came into force in Singapore, and with it the maximum fine for a director who fails to act honestly or with reasonable diligence rose from S$5,000 to S$20,000. The imprisonment ceiling of twelve months stays where it was, but the two sanctions can now sit side by side for the more serious breaches. For anyone who sits on the board of a Pte Ltd, a company limited by guarantee or a family holding company, this is the moment to look again at how decisions are taken, minuted and evidenced.
This guide walks through what changed under the Amendment Act, which sections of the Companies Act 1967 now carry the heavier penalty, and what a board should put in writing before the next difficult decision lands on the table. It is written for directors, founders and company secretaries of private companies, not for listed issuers, although the statutory duties are the same for both.
What the Corporate and Accounting Laws (Amendment) Act 2025 actually changes
Parliament passed the Corporate and Accounting Laws (Amendment) Act 2025 on 5 November 2025. The Act amends the Companies Act 1967 and a number of related statutes, including the Insolvency, Restructuring and Dissolution Act 2018, and it commences in phases rather than all at once. The phase that started on 6 May 2026 contains four changes that matter to a private company board, and the headline is the quadrupled fine for breach of director duties.
The second change tightens who may be a director at all. A person convicted of a money laundering offence under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 is now disqualified from acting as a director, and the wider list of disqualifying offences under section 154 has been extended. The third change concerns auditors: an audit report must now name the individual public accountant responsible for the engagement, rather than carrying only the firm's signature. The fourth protects shareholders when a company buys back shares from some members but not others. Beyond the existing 75% special resolution of all members, a selective off-market purchase now also needs a separate 75% approval from holders of the affected class, excluding the sellers.
None of these is a cosmetic amendment. Together they raise the personal exposure of the people who run Singapore companies, and they arrive against a background of regular ACRA prosecutions of passive and nominee directors. The days of a board seat being a formality with no paperwork behind it are over.
Legal framework
The duties themselves did not change on 6 May 2026. What changed is the price of breaching them. Section 157(1) of the Companies Act 1967 requires every director to act honestly and to use reasonable diligence in the discharge of the office. Section 157(2) prohibits an officer from making improper use of information or of the position acquired by virtue of it, whether to gain an advantage for themselves or to cause detriment to the company. These statutory duties sit on top of the general law: a director must exercise powers in good faith and in what the director honestly believes to be the best interests of the company, for the purposes for which the powers were conferred, and must avoid unmanaged conflicts of interest. Section 156 adds the specific obligation to disclose any interest in a transaction or proposed transaction with the company at a board meeting or by written notice.
The sanction sits in section 157(3). Before 6 May 2026 a breach was punishable by a fine not exceeding S$5,000 or imprisonment not exceeding twelve months. Following the Amendment Act, the same subsection now provides for a fine of up to S$20,000, imprisonment of up to twelve months, or both. The company retains its separate civil claim for any profit made by the director or any loss it suffered, so the criminal penalty is never the only exposure. ACRA's own summary of the commencement is the reference point for boards, and the ACRA announcement on the commencement of key changes under the Corporate and Accounting Laws (Amendment) Act 2025 sets out all four measures in the regulator's own words.
Two further points of framing matter. First, section 157A vests the management of the company in the board acting collectively, which is why the record of how the board decided is the primary evidence of diligence. Second, the Singapore Academy of Law's Law Reform Committee published a report in March 2026 on the possible codification of directors' duties, floating a more detailed statutory list with a civil penalty regime alongside criminal liability. That report is a recommendation, not law, and boards should plan on the basis of section 157 as amended rather than on any future model.
Reasonable diligence in practice: what a S$20,000 breach looks like
The phrase "reasonable diligence" is short, but the cases ACRA brings are not exotic. The typical prosecution involves a director who signed whatever was placed in front of them, who never asked to see the bank statements, or who allowed a company to keep trading without any grip on its accounting records under section 199. Nominee directors appointed only to satisfy the resident director requirement in section 145(1) are the classic defendants, because they often have no involvement in the business at all and no documents showing that they ever asked a question.
The standard is objective but sensitive to the role. A finance director is expected to understand the numbers; a non-executive director is expected to read the board pack, probe anything that looks wrong and follow up. Delegating to management is permitted, since no director can do everything, but delegation without oversight is not diligence. In practice, the strongest defence a director can show a regulator is a minute recording what information was requested, what was received and why the board decided as it did. Directors' written resolutions passed under the procedure in the company's constitution do the same job for decisions taken without a meeting, and members' written resolutions under sections 184A to 184G complete the picture at shareholder level. A board that keeps its directors' and shareholders' written resolutions in a proper minute book has, almost by accident, built the evidence that section 157(1) asks for.
For executive directors, the position is sharper still. Their day-to-day authority is broad, their access to information is complete, and a breach of section 157(2) through diverted opportunities or misused customer data is the easiest for a prosecutor to prove. A director's service agreement drafted to section 157 of the Companies Act restates the honesty, diligence and disclosure duties as express contractual terms, fixes the scope of delegated authority under section 157A, and gives the company a contractual remedy on top of the statutory one. Since 6 May 2026, a contract that stays silent on conflicts and diligence leaves both the company and the director exposed to a penalty four times larger than before.
Disqualification, buy-backs and named auditors: the three changes boards overlook
The heavier fine draws the headlines, but the other three measures in the May 2026 phase are the ones that catch private companies unawares. Start with disqualification. Section 154 already barred persons convicted of offences involving fraud or dishonesty punishable with three months' imprisonment or more from acting as directors for five years from conviction or release. The Amendment Act adds convictions for money laundering under the CDSA 1992 to that list and widens the catalogue of disqualifying offences. A company that keeps a disqualified person on its register is itself in breach, and the person who continues to act commits a further offence. Boards should therefore treat a fresh declaration from each director, at appointment and annually, as routine housekeeping rather than paranoia.
The selective off-market purchase change is the one most likely to affect a founder-led Pte Ltd. Buying out a departing co-founder or an early investor through the company, rather than through a transfer between shareholders, has always required a special resolution under section 76D with the sellers excluded from the vote. Now the company must also obtain a separate 75% approval from the holders of the same class of shares as those being repurchased, again excluding the sellers. Where a company has ordinary shares and preference shares, or a single class held unevenly, this second vote can change the arithmetic entirely. Any shareholders' agreement for a Singapore Pte Ltd with an exit or buy-back mechanism should be checked against the new two-tier threshold before it is relied on.
Finally, the named auditor rule. For an audited company the change is procedural on the company's side, but it feeds directly into director diligence: the board now knows precisely which public accountant stands behind the opinion on its financial statements under section 201, and a director who never engages with that person will find it harder to argue that reliance on the audit was reasonable.
What the constitution should say after 6 May 2026
A company's constitution is the document that translates statutory duties into working rules, and many constitutions in circulation were adopted long before the Amendment Act. Three provisions deserve a look. The clause on directors' interests should require disclosure in a form that satisfies section 156 and should say whether an interested director may count towards quorum or vote; a constitution silent on this point invites the informal handling that regulators later read as a lack of diligence. The clause on board decision-making should spell out how directors' written resolutions are circulated and signed, since the Act leaves that procedure to the constitution, and should cross-refer to sections 184A to 184G for members' resolutions. The clause on share buy-backs, if there is one, should now reflect the two-tier approval for selective off-market purchases under section 76D rather than merely cross-referring to a 75% vote.
Just as important is what the constitution says about removal and vacation of office. With the disqualification list widened, the board needs a clean mechanism for the office to fall vacant automatically on a disqualifying conviction and for the lodgement with ACRA to follow within the statutory fourteen days. A Pte Ltd constitution drafted to the Companies Act 1967 built with these points in mind avoids the awkward position of a board that knows a director must go but has no constitutional route to make it happen.
How to prepare the board's documents on Captain.Legal
Most private companies do not need a law firm to bring their governance paperwork into line with the Amendment Act; they need three documents drafted correctly for Singapore and a discipline for using them. On Captain.Legal you begin with the constitution, answering guided questions on share classes, reserved matters, quorum, interested-director voting and the buy-back mechanism, and the template adjusts the wording to the Companies Act 1967 as amended. You then generate the board and member resolutions the constitution calls for, choosing between a directors' written resolution under the constitution, a members' special resolution at 75% under section 184A, or the paired resolutions a selective buy-back now demands, with the recitals recording the information the board considered.
The third document is the executive director's service agreement. The form asks whether the appointment is executive or non-executive, sets the delegated authority against what the constitution permits, and inserts the honesty, diligence and disclosure covenants that mirror sections 156 and 157. Each document downloads immediately in Word and PDF, so the board can fine-tune commercial terms in Word and file the signed PDF in the minute book. The whole set is drafted for Singapore practice only, with no borrowed clauses from other jurisdictions, and it can be regenerated whenever the board composition or the share structure changes.
Common mistakes directors make with the new penalties
The first mistake is assuming that the S$20,000 fine applies only to fraud. It does not. Section 157(1) is breached by inattention as readily as by dishonesty, and a nominee director who never read a set of accounts is the most common defendant. The second is treating board minutes as a formality to be written after the fact; a minute prepared weeks later, with no record of what was tabled, is close to worthless as evidence of diligence. The third is letting an executive run the company on a staff employment contract that says nothing about fiduciary duties, so that when a conflict surfaces the company has no contractual lever and the director has no documented disclosure process.
The fourth mistake is proceeding with a buy-back from a departing shareholder on the strength of a single 75% resolution, as was sufficient before 6 May 2026, and discovering afterwards that the class-level vote was never taken. The fifth is skipping the disqualification check because "everyone knows each other", which is precisely the situation in which an old conviction stays undisclosed. Each of these is inexpensive to prevent and, since May 2026, materially more expensive to suffer.
Frequently asked questions
What is the maximum fine for a director who breaches section 157 of the Companies Act in Singapore?
Since 6 May 2026 the maximum fine under section 157(3) of the Companies Act 1967 is S$20,000, up from S$5,000. The court may instead impose imprisonment for up to twelve months, and for the more serious breaches it may impose both the fine and the custodial sentence. This penalty is criminal and personal to the director. It does not replace the company's civil right to recover any loss it suffered or any profit the director made from the breach, so the true exposure is usually well above the statutory ceiling.
Do the heavier penalties apply to non-executive and nominee directors?
Yes. Section 157 applies to every director regardless of title, and nominee directors appointed only to satisfy the resident director requirement in section 145(1) are the group ACRA prosecutes most often. The duty of reasonable diligence is judged by what a reasonable person in that role would do, so a non-executive is not expected to run the business, but is expected to read the board pack, ask questions about anything unusual and keep a record of having done so. A nominee who signs without asking has no defence to offer.
Is a board resolution generated online legally valid in Singapore?
A directors' written resolution is valid if it follows the procedure in the constitution, and a members' written resolution is valid if it complies with sections 184A to 184G of the Companies Act 1967, which permit private companies to pass resolutions in writing without a meeting. The resolution must be circulated to all eligible signatories, signed by the required majority and entered in the minute book. Electronic signatures are effective under the Electronic Transactions Act 2010. A template that follows these steps produces a resolution as enforceable as one drafted by a law firm, provided the company completes it accurately.
What documents does a company limited by guarantee need after the Amendment Act?
A CLG is a company under the Companies Act 1967, so its directors owe exactly the same duties under section 157 and face the same S$20,000 maximum fine. Charities and societies that incorporated as CLGs for the benefit of limited liability sometimes forget this. The board should confirm that its CLG constitution under the Companies Act 1967 deals with directors' interests, written resolutions and vacation of office, and should keep minutes to the same standard as a trading company. Charity status adds duties; it never subtracts them.
Within what deadline must a change of director be lodged with ACRA?
The company must lodge a notice of any change in its directors, including a resignation, removal or automatic vacation on disqualification, with ACRA through Bizfile within fourteen days of the change. Missing the deadline exposes the company and its officers to a separate composition fine, and it leaves a disqualified person on the public register in the meantime. The safest practice is to pass the board resolution recording the change on the day it occurs and file the notice immediately, so that the minute book and the register never diverge.
Can I download the board documents in Word and PDF?
Yes. Every constitution, resolution and director's service agreement generated on Captain.Legal is delivered in both Word and PDF. The Word file lets the company secretary adjust names, dates and commercial figures before signature, which matters for resolutions that will be reused at each board cycle. The PDF gives a clean signed copy for the minute book and for lodgement with ACRA where a filing requires supporting documents. Both formats contain the same Singapore-drafted text aligned with the Companies Act 1967 as amended.
Does a senior employee promoted to the board need a new contract?
In most cases yes. An ordinary full-time employment contract under the Employment Act 1968 was drafted for someone without fiduciary duties, so it says nothing about section 156 disclosure, section 157 diligence or the limits of delegated authority. Once the person signs a consent to act and is lodged as a director, those duties apply by force of statute whether the contract mentions them or not. Replacing the staff contract with a director's service agreement gives the company a contractual remedy and gives the director a clear internal process for conflicts.
Has Singapore codified directors' duties in the way the UK did?
Not yet. The Law Reform Committee of the Singapore Academy of Law recommended in March 2026 that further study be given to a more detailed statutory list of duties, possibly with a civil penalty regime running alongside criminal liability. That is a proposal, and no bill has been passed on it. The law in force is section 157 of the Companies Act 1967, supplemented by the general law duties of good faith, proper purpose and avoidance of conflicts, with the penalties raised by the Corporate and Accounting Laws (Amendment) Act 2025 from 6 May 2026.