What Are The Reasons For A Company Director To Resign?
A Director of the company can resign for several reasons which include but not limited to the following
- Physically Unfit
- Disqualification (E.G Criminal Breach of Trust)
- Conflict of interest
Upon resignation of the director due to whichever reason, the Registrar of companies, ACRA, must be notified within 14 days from the date of resignation. ACRA will then update the changes to the statutory public records.
What to Do When a Company Director Resigns?
Under Section 145 (1) of the Company Act, it is required that every company has at least one ordinarily resident director at any time. Resignations can be effected by providing a notice in writing to the company. Also such written notice has to be sent via registered mail to the registered address of the company.
In Singapore, a director’s resignation is valid provided that:
- The resignation procedure is in accordance with the company’s constitution; and
- The company must have at least one remaining director residing in Singapore.
Notifying ACRA of the Resignation
According to the Act, once a director has resigned from the company, it is necessary for the company to lodge a notification of his/her resignation with the Registrar. The process can be done online via BizFile. A resolution for the resignation of the director must be attached together with the application. Upon successful lodgment, the status of the notification will be emailed to the registered email address of the company, or the applicant may check the status online. The entire process usually will take up to three working days. However, it is possible for ACRA to contact the former director who has said to resign for verification. In such cases, the outcome of the notification may be delayed.
Failure to Notify
Should the Company failed to notify ACRA of the resignation of Director, it can lead to an offense of non-disclosure. All related officers in the company who is responsible for the notification but fails to do so may be fined up to S$5,000.
Until the notification is lodged, the cessation will not take effect. The person will remain as a director in ACRA’s records until the notification is lodged. The company director resigning will also need to duly pass over and inform the other directors of all important financial documents related to annual filing. This is to ensure that the year’s financial filings will be accurate and still be able to be completed on time.
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