BX2112 Assignment: Singapore and Australia Corporate Law Comparison

This essay provides a comparative analysis of Singaporean and Australian corporate law, examining key aspects such as corporate governance, regulatory authorities, and insolvency laws. The paper begins by introducing the legal frameworks of both jurisdictions, highlighting their shared common law heritage while acknowledging distinct statutory provisions. The core issue addressed is the extent of similarities and differences between the two systems, particularly focusing on the Companies Act in Singapore and the Corporations Act in Australia. The essay delves into corporate governance structures, the role of directors, and the concept of lifting the corporate veil. It also explores the functions of regulatory bodies like ACRA, ASIC, and APRA. The analysis extends to insolvency laws, contrasting the provisions in both countries. The essay concludes by summarizing the key points of comparison and contrasting the two jurisdictions highlighting their differences.

Running head: LAW OF BUSINESS ORGANIZATION
LAW OF BUSINESS ORGANIZATION
Name of the Student
Name of the University
Author Note

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Summary
This paper discusses the different similarities and the differences between Singapore and
Australia. It talks about this with the help by applying the issues to the rules and then analyzing
the rules in relation to both the laws on topics of Corporate governance, regulating authorities
and matters relating to insolvency. It lastly concludes by summarizing the points discussed in the
paper.
Introduction
Hong Kong and Macau have been considered to be an autonomous region where the
legislations and the administrative powers and the judicial systems are different and separated
from that of People’s Republic of China. They have unique and distinct laws that are different
from the other regions and they enjoy the autonomy. The leaders in Hong Kong are elected only
after selecting from a pool of candidates who were pre-approved. They get considerable amount
of freedom regarding the different legislations and the judicial decisions and the functioning of
the executives1.
The Singaporean law has derived many of its legislative ideas from the common law
principles which are also shared by the Australian legislations as both share the same legal
heritage. Although, there are different laws and regulations that are accompanied by different
statutory provisions that can be distinguished the laws are somewhat similar due to its origin
there are a few differences and the position of Singapore in few of the aspects are ahead of the
Australian legislations. There are different strategies and new policies and changes are being
implemented by the government. The changes are taking place and restructuring along with
1 Morris, Paul. "Preparing pupils as citizens of the Special Administrative Region of Hong Kong: an
analysis of curriculum change and control during the transition period." Education and Society in Hong
Kong: toward one country and two systems. Routledge, 2017. 117-145.

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amendments are being enforced which are making the statutory provisions better. Therefore,
there is a long road ahead and more opportunities are opening up and created in order to improve
both the legislations2.
Issue
The issue that is to be addressed in this paper is to discuss the various aspects of
Singapore Corporate Law and to what extent is it similar or different to the Australian Corporate
Law.
Rule
In Singapore, the companies or corporations are regulated and governed by the
Companies Act (Cap 50, 2006 Rev Ed)3. It can also be understood that there are some or few of
the companies that are governed or regulated by other acts or statutes along with the above
mentioned Act. In certain instances, the several banks and other insurance companies are
regulated and governed by the Insurance Act (Cap 142, 2002 Rev Ed)4 or the Banking Act (Cap
19, 2008 Rev Ed)5 separately. The limited liability partnerships are considered to be governed or
regulated by the Limited Liability Partnership Act (Cap 163A, 2006 Ed Rev)6 in spite of having
the name they are treated as body corporates. The provisions, which are laid down in the statutes
that regulate or control the operations of the companies, are considered to be augmented by the
common law. It has been laid down under section 17(3) of the Companies Act7, that if there is a
2 Zhang, Dongqing, et al. "Conventional and decentralized urban stormwater management: A comparison
through case studies of Singapore and Berlin, Germany." Urban Water Journal 14.2 (2017): 113-124.
3 Companies Act (Cap 50, 2006 Rev Ed).
4 Insurance Act (Cap 142, 2002 Rev Ed).
5 Banking Act (Cap 19, 2008 Rev Ed).
6 Limited Liability Partnership Act (Cap 163A, 2006 Ed Rev).
7 Companies Act (Cap 50, 2006 Rev Ed).

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business enterprise that has more than twenty members then it needs to be considered as a
company and it requires to follow the guidelines laid down in the Companies Act.
The company according to the Companies Act is considered to be separate identity and it
has a distinct personality and existence which is different from the members. It can be seen in the
case of Salomon v A Salomon & Co Ltd [1897] AC 228. This case can be seen as an example
where the most significant factor of the case is that the debts which are being incurred by the
company or an organization are the company’s itself. The members of that particular company or
organization does not share the liabilities of the company. The same can be seen in the case of
Lee v Lee´s Air Farming Ltd [1961] AC 129. The creditors in a company or an organization
would only be paid the debts that have been owed to them by the company or the organization. If
the company or the organization is considered to be bankrupt or insolvent then the creditors have
the unfortunate fate of bearing the loss.
The company or an organization has been considered to be a separate distinct personality
which is different from that of the members who are working in that company or organization.
There are certain instances or circumstances where the company faces some kind of loss or
incurs debt and the courts in some situations consider the members to be liable for that
company’s misfortune and treat the company and its members as one. When the courts try to
treat the company and its members as one then it is to be said that the courts have tried to lift the
corporate veil or pierced through the corporate veil. This falls under two categories where one is
through common law and the other is through statutory laws.
8 Salomon v A Salomon & Co Ltd [1897] AC 22
9 Lee v Lee´s Air Farming Ltd [1961] AC 12

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The company or organizations are to be regulated and governed by the directors of that
company which has been laid down under Section 157A of the Companies Act10. The directors
have certain fiduciary duties for the companies or the organization under the common law that
have been contained in Section 157 of the Companies Act11. The company has a separate legal
personality and since the company or organization has a separate legal personality from that of
its members therefore, a member does not have the rights to sue the company in order to
implement rights that belong to the company. This is considered to be the ‘proper plaintiff’ rule.
The regulatory authority that controls the corporate law in Singapore along with is
considered to be ACRA which is Accounting and Corporate Regulatory Authority Act which
mainly regulates the Accountants Act (Cap 2)12, the Business Names Registration Act (Cap 32)13,
the Companies Act (Cap 50)14, the Limited Liability Partnerships Act (Cap 163A)15 and the
Limited Partnerships Act 200816. It tries to administer and make reports and various
recommendations to the Government on different matters that are in relation to the registration
and to govern the different corporate service providers. It also tries to represent the government
in the international arena in matters relating to registration and govern it the companies or
organizations.
The Singapore insolvency laws are stated under the Companies Act and the Australian
Insolvency laws are stated under the Corporations Act, 200117.
10 Companies Act (Cap 50, 2006 Rev Ed).
11 Companies Act (Cap 50, 2006 Rev Ed).
12 Accountants Act (Cap 2).
13 Business Names Registration Act (Cap 32)
14 Companies Act (Cap 50, 2006 Rev Ed).
15 Limited Liability Partnerships Act (Cap 163A).
16 Limited Partnerships Act 2008.
17 Corporations Act, 2001.

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Application
The directors under the Corporations Act are considered to be liable to pay debts if there
are any debts incurred by the company or the organization where the company is unable to pay
the debts or the dues which are owed by the company to the creditors. Therefore, the directors
have the liability to pay on behalf of the company. This is also similar to that of the Companies
Act in Singapore. There are certain specific instances where the directors along with the
shareholders are liable to pay on the company’s behalf. This is considered to be the lifting of the
corporate veil or the piercing of the veil when the directors and shareholders are liable on behalf
of the company. However, to contradict this statement there are certain circumstances where the
directors or the shareholders are liable because the court seems to consider the company and the
members of the company as one which makes the members of the company or the directors and
the shareholders liable to pay for the debts which are incurred by the company. This instance is
also considered to be the lifting of the corporate veil or the piercing through the corporate veil.
There is a similarity between the concept of company is considered to be a separate legal
entity in Singapore as well as Australia as the concept came into force after the landmark case of
Salomon v A Salomon & Co Ltd [1897] AC 2218. This case is an example of the concept that a
company is different from that of its members, shareholders or directors and the company has a
distinct identity. Since, both of these laws were derived from the common law principle it has
certain features which are similar. The only distinction that can be found in this part is the
statutory provisions which are different from each other. The provisions for separate legal
identity of a company has been laid down in the Corporations Act.
18 Salomon v A Salomon & Co Ltd [1897] AC 22.

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In Australia the corporate governance structure is a little similar as both the sources are
derived from the common law system. Corporate governance has been defined as the framework
of the rules and regulations that govern and regulate the processes and the authorities exercise
control over the regulations of the company or an organization. In the provisions stated in
Singapore Companies Act the corporate governance structure is similar to an extent as the
workings of the companies or organizations are regulated or governed by the board of directors
for the shareholders’ interests. The duties are imposed on the directors of an organization in
order to regulate and govern the operations or activities of the companies or the organizations. In
comparison to Singapore the Australian corporate governance model needs to improve and
implement new strategies. However, to contradict the Singapore Corporate Governance Code is
considered to be slightly different from the Australian Corporate Governance Code as the former
looks after the matters or regulates the operations of a company or an organization in a broader
perspective by focusing or emphasizing on the matters related to the Board of Directors,
performance of the Board regarding those matters the board composition and others. Whereas,
on the other hand, the Australian Corporate Governance Code looks after the matters try to lay
rules and regulations which would assist in managing the company or the organization. They
also respect the interests of the shareholders. The Australian Corporate Governance Code has
specific rules and regulations laid down, whereas the Singapore Corporate Governance Code has
guidelines laid down in a broader perspective.
The regulating authorities of the Australian Corporate Law are considered to be the
Australian Securities and Investments Commission (ASIC)19 and the Australian Prudential
Regulatory Authority (APRA)20. Whereas, the regulating authority in Singapore is considered to
19 Australian Securities and Investments Commission.
20 Australian Prudential Regulatory Authority.

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be Accounting and Corporate Regulatory Authority. The regulatory authorities of these
regulators include proper registration of the companies and licensing of those companies. It has
similar functions to govern and regulate the companies or the organizations in general. The
Singaporean system of law is mainly based on statutory laws which are enacted and enforced by
the Parliament and common law principles. Australia and Singapore are considered to share
similar legal culture as both of them were derived from the United Kingdom. Therefore, there
can be various similarities found as they share similar legal heritage.
The Singapore law states that during the time when a company or an organization
becomes insolvent or is in close connectivity to insolvency the directors of those companies or
the organizations facing such difficulties should act in good faith and concentrate on the interests
of the creditors of those organizations or companies rather than focusing on the interests of the
shareholders. If the directors fail to do so then it is considered to be breach or violation of such
fiduciary duties. The directors should not enter into any kind of contract where the director is
aware of the company’s financial condition and is aware that the company would not be able to
pay. This is also considered to be a breach of the director’s duties among other duties. These
duties are similar to that of the Australian insolvency laws and directors duties.
Conclusion
Therefore, from the above discussion, it can be understood, that the laws and statutory
provisions can be different and distinct but since it has been derived from the common law
principle the similarities are prevalent and these provisions have similar objectives.

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Bibliography
Accountants Act (Cap 2).
Australian Prudential Regulatory Authority
Australian Securities and Investments Commission.
Banking Act (Cap 19, 2008 Rev Ed)
Business Names Registration Act (Cap 32).
Companies Act (Cap 50, 2006 Rev Ed).
Corporations Act, 2001.
Insurance Act (Cap 142, 2002 Rev Ed).
Lee v Lee´s Air Farming Ltd [1961] AC 12
Limited Liability Partnership Act (Cap 163A, 2006 Ed Rev)
Limited Liability Partnerships Act (Cap 163A).
Limited Partnerships Act 2008.
Morris, Paul. "Preparing pupils as citizens of the Special Administrative Region of Hong Kong:
an analysis of curriculum change and control during the transition period." Education and
Society in Hong Kong: toward one country and two systems. Routledge, 2017. 117-145.
Salomon v A Salomon & Co Ltd [1897] AC 22
Zhang, Dongqing, et al. "Conventional and decentralized urban stormwater management: A
comparison through case studies of Singapore and Berlin, Germany." Urban Water Journal 14.2
(2017): 113-124.