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director question

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ts1978
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director question

Postby ts1978 » Mon, 02 Mar 2015 11:05 am

I've tried search but no luck (or maybe I'm just bad at searching as this seems like something I'm sure has been asked before...)

My circumstances:

1. I am an EP holder and an executive director of the entity which has issued my EP.
2. I have invested in a newly registered Pte Ltd (not the same as #1 above), and would like to take a non-paid, non-executive (e.g. non-operating) seat on the board.

ACRA doesn't care, but would this present any issues with MOM?

thank you.

PNGMK
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Re: director question

Postby PNGMK » Mon, 02 Mar 2015 11:09 am

ts1978 wrote:I've tried search but no luck (or maybe I'm just bad at searching as this seems like something I'm sure has been asked before...)

My circumstances:

1. I am an EP holder and an executive director of the entity which has issued my EP.
2. I have invested in a newly registered Pte Ltd (not the same as #1 above), and would like to take a non-paid, non-executive (e.g. non-operating) seat on the board.

ACRA doesn't care, but would this present any issues with MOM?

thank you.


Why would you want to do 2? Oh because you have invested. I don't think MOM will care.
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ts1978
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Re: director question

Postby ts1978 » Mon, 02 Mar 2015 12:11 pm

PNGMK wrote:
ts1978 wrote:I've tried search but no luck (or maybe I'm just bad at searching as this seems like something I'm sure has been asked before...)

My circumstances:

1. I am an EP holder and an executive director of the entity which has issued my EP.
2. I have invested in a newly registered Pte Ltd (not the same as #1 above), and would like to take a non-paid, non-executive (e.g. non-operating) seat on the board.

ACRA doesn't care, but would this present any issues with MOM?

thank you.


Why would you want to do 2? Oh because you have invested. I don't think MOM will care.


Yep.

In the first case, I am an executive/board member for an established company.
The second is a pure investment. I just want a seat to manage my investment and mentor the CEO of that business in a board context.

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Strong Eagle
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Re: director question

Postby Strong Eagle » Mon, 02 Mar 2015 12:22 pm

Your problem is this: You must convince MOM that you are an outside director... you know... like the bank VP that sits on the tech company's board as a financial advisor. Then you might be OK.

But, you're not. Paid, or unpaid, you yourself just said you want to "manage my investment and mentor the CEO". So, you intend to be an active management partner in the company. Doesn't matter whether you are directly paid or not. You have a fiduciary interest in the company and you intend to be an active manager.

I think you'll be shot down. You're an active participant. You don't say how many other directors are on board, nor whether you are a managing director but I judge you have a problem.

ts1978
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Re: director question

Postby ts1978 » Mon, 02 Mar 2015 12:33 pm

Strong Eagle wrote:Your problem is this: You must convince MOM that you are an outside director... you know... like the bank VP that sits on the tech company's board as a financial advisor. Then you might be OK.

But, you're not. Paid, or unpaid, you yourself just said you want to "manage my investment and mentor the CEO". So, you intend to be an active management partner in the company. Doesn't matter whether you are directly paid or not. You have a fiduciary interest in the company and you intend to be an active manager.

I think you'll be shot down. You're an active participant. You don't say how many other directors are on board, nor whether you are a managing director but I judge you have a problem.


You're right. I received a reply from MOM about 10 minutes ago and was shot down. They stated that even the basic requirements of discharging duties required of a director constitute "work" in their view. Let alone the more nuanced question of whether it is in practice truly a non-executive role.

They're only willing to talk if I can demonstrate that the board seat is important to my current role, which in this case it's clearly not.

Not the end of the world, I'm happy to deploy my capital to this venture regardless but it would've been a help to them having an experienced director on their board.

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Re: director question

Postby Strong Eagle » Mon, 02 Mar 2015 11:09 pm

If you are deploying capital as a shareholder than you can set up the articles of incorporation such that all decisions normally left to directors under the companies act have to be voted upon in an AGM or EGM.

ts1978
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Re: director question

Postby ts1978 » Tue, 03 Mar 2015 10:10 am

Strong Eagle wrote:If you are deploying capital as a shareholder than you can set up the articles of incorporation such that all decisions normally left to directors under the companies act have to be voted upon in an AGM or EGM.


True.

In my case I'm not looking for a proxy method to remotely be involved - other than (had MOM been OK with it), participating with a seat on the BoD. But they were not, so that's that for me at least. There is an existing management team, other investors, other directors, etc. A legit enterprise.

That said - this would indeed be a way to deal with the original scenario I described while maintaining some level of strategic control if that was what was sought after.


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