Q: When must a company start keeping a register of registrable controllers? What is the consequence if the companies did not do so within the grace period?
A: Newly incorporated companies will be required to have and maintain the registers of registrable controllers within 30 days from the date of incorporation and existing companies will be given 60 days from the date of commencement of the regime (31 Mar 2017) to have and maintain the required registers. Failure to comply is an offence.
Q: Will companies have difficulty identifying the controller?
A: As a start, a company may write to all its legal owners (shareholders) as well as directors and ask whether they are controllers or know anyone who is a controller, by sending that person a notice. For a majority of companies, their shareholders are likely to be the controllers. Therefore the names that they will reflect in their registers of controllers will be the same as the names on their registers of members.
Q: If companies/LLPs/foreign companies cannot maintain the registers by the stipulated timelines (e.g maybe because of uncontactable controllers), what are the consequences/actions ACRA may undertake?
A: If a company does not get a response from a potential controller to whom it sent a notice, it must enter into its register of controllers, the particulars of the addressee that it has in its possession with a note that the particulars have not been confirmed by the controller. This must be done within 2 business days after the end of 30 days after the date on which the notice is sent by the company to the registrable controller. The company is obliged to send a notice to all those whom it believes could be a controller, otherwise it commits an offence. Minimally ACRA expects companies to send a notice to all its shareholders and directors asking whether they are the controllers or know any controllers on an annual basis.
Q: What is the penalty for failing to maintain a register of registrable controllers?
A: The maximum penalty for non-compliance is $5,000. This is similar to the existing penalty if companies fail to file annual returns.
Q: To what extent must companies trace their controllers?
A: Companies need only send notices to any person whom they know or have reasonable cause to believe to be controllers, who knows the identity of the controllers or who is likely to have that knowledge.
If the recipient of a notice does not reply, the company need not ensure that the recipient reply and may enter into its register the particulars of a controller with a note indicating that the controller has not confirmed the particulars. Please refer to the ACRA-issued Guidance on this page for more details.
Q: In its tracing of controllers, must a company that hits a foreign entity, trace further to find out the individual controllers?
A: Yes. This is similar to where registered filing agents conduct customer due diligence with respect to foreigners.
Q: If I outsource my corporate secretarial work, can my corporate secretary keep my register of registrable controller?
A: If your corporate secretary is a registered filing agent (RFA), he may keep your register of registrable controller at his registered office.
Q: Can a locally-incorporated company rely on information provided by its appointed registered filing agent ?
A: If a RFA provides information of a controller to his client company on behalf of a controller, the company can rely on that information to maintain its register of registrable controller.
Q: Do shareholders/company directors have the rights to see the registers of registrable controller?
A: The company’s officers are able to view the register of registrable controllers. The officers are the ones responsible for maintaining the register. The shareholders will not be able to view the register as the register is not meant for public viewing.
Q: My company is dormant. Can I be exempted from maintaining the registers of registrable controller?
A: Dormant company cannot be exempted and is required to maintain the register of registrable controllers.
Q: If the controller’s details are already disclosed in business profile (i.e, as shareholders), is it still necessary to perform these checks then?
A: Yes. The register of registrable controllers is kept by the company or LLP, so the company or LLP must do the necessary tracing of their own controllers and enter information on the controllers into their respective registers.
Q: What happens to the registered filing agents’ AML/CFT obligations with the implementation of the register of registrable controllers?
A: RFAs must continue to comply with the AML/CFT obligations under the ACRA (Filing Agents and Qualified Individuals) Regulations 2015, including the obligation to collect beneficial ownership information of their clients as part of customer due diligence. If a RFA is appointed as a company secretary of a locally-incorporated company or is appointed by the locally-incorporated company to help it comply with the obligations pertaining to the register of registrable controllers, he would have to separately carry out the obligations pertaining to the register of registrable controllers as the secretary for the company.