A constitution is a set of document that circumstantiates rules governing your company. The constitution will also explain the relationship between your company, its shareholders and all the directors, and any other individuals involved directly / indirectly to the company.
When drafting your company’s constitution, just remember that as long as the constitution don’t conflict with the Singapore Companies (Amendment) Act 2017 or any other regulations in Singapore, it will be representing a legal binding between everyone involved in the company.
The constitution is basically an important legal document that needs to be taken into account incorporating a new Singapore company. When we mean important, we mean that before incorporating your Singapore Company, you are required to draft one forehand.
According to the Singapore Companies Act, the constitution of a company is defined as:
- The constitution that a company registers with the Registrar, or
- In the case of companies existing before the 2014 Amendment to the Companies Act, the Memorandum and Articles of Association of the company in force immediately before the amendment date.
According to the Singapore Company Law, the constitution is a legal requirement when incorporating a new Singapore company.
The constitution can be designed and modified to suit a company’s operations. It can be drafted in a way whereby it gives you greater flexibility and certainty in your governance, and allows you to have more control as your company grows or changes over time.
Key Points to Consider When Drafting the Constitution
Your business objectives are the results you hope to achieve as you run and grow your business.
This is definitely an important aspect if you have a desired structure to implement in your company. This will ensure your company complies with legal and compliance regulations, and also avoid any potential conflicts among everyone involve in it.