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Director of a company becoming EP holder of another company

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marchepa
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Director of a company becoming EP holder of another company

Postby marchepa » Wed, 07 Dec 2016 5:08 pm

Hi guys,
I looked through the current topics but I couldn't find any topic reflecting my situation. Please forgive me if my question has been discussed before.
Here it is:

I have co-founded a company and I am director of that company together with a local director.
When we set up the company, I was not residing in Singapore so there were no issues there.
I used to be EP, PEP and LTVP holder in the years prior to founding the company (although that's probably not relevant).

Subsequently I received a job offer in Singapore about 1 year ago, which I accepted and received an EP for that. Now I saw here: http://www.mom.gov.sg/faq/employment-pass/can-ep-holders-be-registered-as-directors-in-another-company that EP holders can't be registered as directors without approval from MoM and my interpretation of the wording is that they would grant approval only for related companies or companies that are relevant to the primary occupation.
Now my directorship is unrelated to the company that gave me EP and it's not relevant to my EP occupation.

When I applied for the job, I disclosed my directorship and received written consent from my employer to continue the role as director of the company I co-founded.
MoM did not question my role as director, decline my EP or ask me to resign from my directorship.

The question now is, what should I do?
Obviously I would like to find a solution that does not endanger my EP or my directorship in the company.

Thanks in advance guys!

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sundaymorningstaple
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Re: Director of a company becoming EP holder of another company

Postby sundaymorningstaple » Wed, 07 Dec 2016 9:32 pm

Did you tell MOM you were a director in another company here in Singapore? ACRA and MOM are under different ministries.

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Strong Eagle
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Re: Director of a company becoming EP holder of another company

Postby Strong Eagle » Thu, 08 Dec 2016 1:21 am

I think you are going to have to have a conversation with MoM. At the bottom of it all is the MoM requirement that a person on EP be working for only one company. So, the question becomes: Is being a director of another company "working" for that company.

Certainly, there are circumstances where that is not the case. For example, let's say you were a senior VP at Stan Chart on an EP. You could probably be an OUTSIDE director to a client company of the bank. You might be providing financial advice at periodic directors meetings but would not be engaged in the active management of the company.

So, too, if your company is dormant and not earning revenues or providing product, you could probably remain director. When I left Singapore, I still had to go through the time period of winding up my company but I was no longer normally resident. A friend on EP was permitted to be my normally resident director for the purposes of closing the company.

If, however, your company is active in business, then you are going to have an issue. A director, by definition of the Companies Act IS corporate management. You can't say, "Well, I don't actually do anything" because, by definition you are responsible for managing the company.

If you are comfortable with your local director, I don't see how this will be an issue to resign your directorship. It is the shareholders who hold all the power, and the shareholders can replace the local director at will. In any event, your being a director in no way reduces the power of your local director... you both share identical responsibilities and powers.

If your intent is to replace your local director with yourself, and you have an active company, then my bet is that MoM will require you to resign your directorship to get your EP, or will terminate your EP with the company you are working for. You would have to apply for EP for your own company, then work as a contractor into your current employer.


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