Directors who fail to act in their company’s best interests or who do not exercise reasonable care in managing the business will soon face harsher penalties.

Parliament passed amendments to the Companies Act on 5 Nov 2025, raising the maximum fine for such offences from S$5,000 to S$20,000. Serious offenders may also be jailed for up to 12 months.

Currently, the law allows either a fine of up to S$5,000 or a jail term of up to 12 months, but not both. The revised law now makes it possible to impose both penalties on serious cases.

Second Minister for Finance Indranee Rajah explained during the debate on the Corporate and Accounting Laws (Amendment) Bill that penalties needed to be strengthened to match those in other major common law countries. The aim is to provide stronger deterrence and encourage directors to take their responsibilities seriously.

One notable change is that the individual public accountant who is mainly responsible for an audit must now be named in the audit report. Currently, most audit reports are signed off using the name of the accounting firm rather than the individual auditor.

These amendments follow a review of regulatory processes conducted by the Accounting and Corporate Regulatory Authority (Acra).