Appointment of Directors

Under Singapore corporate law, all companies are required to have at least 1 director who is ordinarily resident in Singapore (section 145(1)).

• Listed companies: Listed companies are required to have at least 3 directors because listed companies need an audit committee consisting of at least 3 directors

The Company Act does not prescribe the manner in which directors are to be appointed. That is left generally to the company’s Articles of Association (AOA).

• When a new company is formed, the people who are to be the first directors of the company must be named in the application to register the company lodged with ACRA.
• In existing companies, typically, directors are elected by the members at the AGM of the company.

Public Company: In the case of a public company, it is impermissible to elect 2 or more persons as directors in a single resolution (section 150(1), Companies Act).

• Each director must be elected individually and a ‘package deal’ is not allowed, unless it is agreed unanimously at the meeting that such a resolution may be moved.
• The purpose of this section is to prevent a motion being moved for the appointment of 2 or more directors en bloc, and thus preventing the members from exercising their choice to accept or reject any particular candidate.

Although election by the AGM is the commonest way of appointing directors, it is not the only way. Articles may provide that a certain person or body will have the power to appoint the directors of a company. However, such an article will not be enforceable by a person who is not a member of the company unless there is a contract outside the article embodying that right.

Have a question concerning the appointment of directors? Need help making sense of corporate law in Singapore? You may wish to seek legal advice from a professional team of commercial lawyers.