Singapore is an international commercial powerhouse with a variety of corporate incentives and tax breaks that entice many to incorporate their enterprises. This article introduces the legal obligations of directors under Singapore law.

It is common for businesses with operations in Asia to elect to incorporate a Singapore corporation, to submit to the Singapore jurisdiction and to elect for their contracts to be governed by Singapore law. As such, it is relevant to have a basic understanding of the liability of a director of a Singapore corporation.

Broad definition of a director:

In Singapore, a director is defined under the Companies Act 1967 (the “Act”) to be any person occupying the position of director of a corporation or by whatever name called and includes a person in accordance with whose directions or instructions the directors or the majority of the directors of a corporation are accustomed to act and an alternate or substitute director.

Regulatory requirement:

Director appointment must comply with both the Act and the regulatory authorities including the Accounting and Corporate Regulatory Authority of Singapore.

Directors’ duties:

Every director, including nominee directors, owes the company a fiduciary duty to act with reasonable skill and care, in good faith, and always in the best interests of the company.

Conflict of Interest

This includes avoiding any real or potential conflicts of interest by the director, which may include the director’s next of kin, and when conflicts of interest cannot be avoided, it is the director’s duty to: (i) declare the nature, character, and extent of any potential conflicts of interest at a meeting of the company’s directors; or (ii) provide the firm with written notification if the director is engaging in anything that could result in a conflict of interest.


Due to their fiduciary duty, directors are not permitted to profit from their position as an officer or agent of the firm directly and indirectly. If this is shown to be true of any director, they may be personally liable to the company for any profit made or damage suffered by the company as a result of the exercise of powers for any improper purpose.

Civil Liability

In most cases, civil liability takes the form of a fine for a variety of civil wrongs, such as a penalty for non-compliance with regulatory requirements. A director may also be sued in civil court to obtain remedies such as restitution, property restoration, and injunctive relief.

Criminal liability

A director found in breach of his or her fiduciary duties in Singapore may be criminally liable to imprisonment for a term not exceeding twelve months.

In addition, a director may be criminally liable for fraud or dishonesty, including making misstatements and disseminating misinformation about the company, wilfully omitting to state information or state new circumstances on the company. Criminal liabilities under such instances may include imprisonment for a term not exceeding three years.

How to limit directors’ liability?

A company may indemnify its directors against third party liability. However, any attempts to indemnify a director for negligence, default, breach of duty or breach of trust in relation to the company will be void under Singapore law.

The best way for directors to avoid liability is to ensure that they act responsibly towards the company, taking every step possible to ensure the truth of one’s statement, declaring any conflicts of interest, abstaining from voting on matters of interest and keeping abreast with the regulatory requirements.

If you would like any further information regarding incorporation of a company in Singapore, risk assessment of director’s liabilities, potential breaches, or ratification, please contact us at

Disclaimer: The information above is neither exhaustive nor conclusive and is not intended to constitute legal advice; instead, the information above is for general informational purposes only.

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