Understanding The Qualifications Of A Nominee Director

Are you a foreigner looking to start a business in Singapore? If that’s the case, you’ll want to familiarise yourself with the concept of nominee directors. While setting up a company in Singapore is typically a straightforward procedure, foreigners may encounter challenges when it comes to meeting the requirement of having a local director. The Companies Act mandates that all companies must designate a local director who is either a Singaporean citizen or a permanent resident, and this could pose a hurdle for foreign entrepreneurs.

The purpose of such a requirement is to ensure that all companies have a local director who will be accountable to the corporate laws of the country. If you have no local director in mind for your company, you may opt to appoint a nominee director for a minimal fee – an individual appointed by a business owner to act on their behalf. On paper, they take on the role of company director.

However, for the appointment of a nominee director to be proper, the Companies Act provides certain qualifications that every appointee should meet. To understand more about these qualifications, read on as this article discusses some of the most essential qualifying requirements for a nominee director in Singapore.

Age and legality 

Under the Companies Act, a nominee director should be at least 18 years of age and must be of full capacity. In order to be deemed as having full capacity, the nominee director must have the ability to comprehend the nature of their responsibilities as well as the consequences of their actions. In other words, they should be capable of understanding the role they are undertaking.

Legality-wise, the legal requirements for nominee directors are just the same as the requirements for ordinary directors.

Candidate history and convictions

According to Singapore law, a candidate for nominee directorship is disqualified if they have been convicted of any offence that involves dishonesty or fraud and is punishable with imprisonment for at least three months. This legal provision includes convictions both inside and outside Singapore. Furthermore, the convictions include more than textbook law-breaking, such as embezzlement and fraud. They cover more subjective judgments like a ‘failure to act diligently and honesty as a director’.

Disqualification orders

A disqualification order is an order from the court that precludes an individual from becoming a nominee director. Every disqualification order must be issued through the Company Directors Disqualification Act, which enumerates all the grounds upon which an individual might be made unqualified for a directorship. Most of the time, disqualification orders are issued for breaches of the Companies Act and for unfit conduct of the candidate.

Form 45 requirements

Before assuming the position of a nominee director, candidates are mandated by law to sign a compulsory document called Form 45. The purpose of this document is spelt out in its full name: ‘Consent to Act as Director and Statement of Non-Disqualification to Act as Director’. Essentially, Form 45 functions as a consent form for those nominee director candidates who qualify and enumerates the clauses that could disqualify any candidate.

Conclusion 

Overall, in order to be eligible for the role of a nominee director, one must be a citizen or permanent resident of Singapore, of qualifying age, has full capacity, and possesses no ground for disqualification under the law. Although these qualifications seem limiting, they actually provide companies with a wide scope for finding the right person for the job. Ideally, a nominee director should be someone trustworthy with a professional career and who can be relied on to maintain the legal status of a company.

If you are looking for the most reliable nominee director service in Singapore to help you find the best nominee director for your company, look no further than at OneStop Professional Services! We are a reputable accounting and audit firm offering a wide range of top-notch corporate services, from auditing and accounting services to nominee director and secretarial services in Singapore. Please do not hesitate to contact us today to learn more about how we can help you.