New Business Names Registration Act 2014 Commenced on 3 January 2016, Replacing Previous Business Registration Act

The new Business Names Registration Act 2014 (the “Act”) commenced on 3 January 2016. It repeals and reenacts with amendments the previous Business Registration Act (the “BR Act”). This change of name is intended to more accurately reflect the scope of the legislation. The amendments are intended to simplify the process for the registration of persons and their business names, as well as reduce the regulatory burden on business owners. This article highlights some of the key changes in the Act.

INDIVIDUALS (EITHER SOLE PROPRIETORS OR PARTNERS) CARRYING ON BUSINESS IN SINGAPORE UNDER ONLY THEIR FULL NAMES NEED NOT REGISTER UNDER THE ACT

PREVIOUSLY	NOW
Under the prior BR Act, individuals carrying on businesses in their own names had to register with the Accounting and Regulatory Authority of Singapore (“ACRA”) unless they were otherwise exempted.	Under Section 4(1) of the Act, individuals or a partnership of two individuals, who carry on businesses under their full legal names, are exempt from the registration requirements (although they may opt to voluntarily register).

The rationale behind the above exemption is that as such individuals are already identifiable, there is no need to impose an additional regulatory burden (examples of such individuals include private tutors and music teachers). The change brings Singapore in line with the position in Australia, Canada and the United Kingdom.

THE REGISTRAR IS EMPOWERED TO CANCEL A PERSON’S REGISTRATION IF THE CPF BOARD (I) INFORMS THE REGISTRAR HE HAS NOT PAID UP HIS MEDISAVE CONTRIBUTIONS AND (II) REQUESTS FOR THE REGISTRAR TO CANCEL HIS REGISTRATION

PREVIOUSLY

NOW

Under the prior BR Act, the Registrar could prevent a person from renewing his registration if he or she had outstanding Medisave contributions.

Under Section 12(2) of the Act, the Registrar has extended powers to cancel subsisting registrations. This includes cancelling a person’s registration (as well as his or her business name) in a situation where the CPF Board has provided notification that (1) the person is a member of the Central Provident Fund and (2) has outstanding Medisave contributions. The Registrar will give a registrant at least 30 days’ written notice and a chance to explain before cancelling the registration.

The above measure is aimed at encouraging business owners to make prompt contributions to their Medisave accounts. This is particularly significant for self-employed persons as Medisave is their only source of Central Provident Fund savings.

THE REGISTRAR IS EMPOWERED TO RESTORE A CANCELLED/TERMINATED REGISTRATION THAT HAS CEASED WITHIN 12 MONTHS

PREVIOUSLY	NOW
There was no express provision under the BR Act empowering the Registrar to restore a cancelled or terminated registration. The usual procedure to achieve this was by way of appeal to the Minister.	Under Section 24 of the Act, the Registrar is empowered to restore a cancelled or terminated registration that has ceased within 12 months of its being cancelled or terminated (unless special circumstances apply).

The changes simplify the procedure for both the Registrar and previously registered persons.

ALLOWS REGISTERED INDIVIDUALS TO REPORT AN ALTERNATE ADDRESS, WHICH WILL GENERALLY PREVENT DISCLOSURE OF THEIR RESIDENTIAL ADDRESS BY THE REGISTRAR

PREVIOUSLY

NOW

Residential addresses filed with the Registrar under the prior BR Act were publicly available.

Under Section 30 of the Act, the Registrar is prohibited from disclosing and making available for public inspection the particulars of a registered individual’s residential address if he or she provides an alternate address. This is as long as the alternative address is (1) an address at which the individual can be located, (2) is not a post office box number and (3) is located in the same jurisdiction as the individual’s residential address.

EXTENSION OF CRIMINAL AND CIVIL SANCTIONS TO A PERSON WHO STILL CARRIES ON BUSINESS AFTER HIS REGISTRATION (I) HAS BEEN CANCELLED OR (II) HAS CEASED

PREVIOUSLY

NOW

Under the prior BR Act, it was a criminal offence for a person to carry on business without registration (if required to register) or to fail to update ACRA on certain changes in particulars. Offenders could be fined up to S$5,000 or jailed up to 12 months, or both. In addition, an offender could not enforce any contractual rights arising from his business unless he is granted relief from the court.

Under Section 35(1)(a)(iii) of the Act, the same civil and criminal consequences now extend to those who carry on business (1) after their registration has been cancelled by ACRA or (2) after the registrant has notified ACRA that he has ceased the business.

This change is intended to improve the accuracy of ACRA’s register as it will encourage persons who carry on business to register and renew their registration promptly.

INCREASE OF MAXIMUM PENALTIES FROM A S$5,000 FINE, 12-MONTH JAIL TERM OR BOTH TO A S$10,000 FINE, TWO-YEAR JAIL TERM OR BOTH

The maximum penalties for the following criminal offences under the Act have also been increased from a S$5,000 fine, a jail term of up to 12 months or both, to a S$10,000 fine, a jail term of up to two years or both:

carrying on business either (1) without registration, (2) under a different name from the registered business name, (3) after the Registrar has cancelled the registration or (4) after the registrant has ceased to be registered;
not complying with the Registrar’s summons;
not complying with the Registrar’s request for information;
resisting or obstructing the Registrar officer in performing his duty; and
knowingly giving false information to the Registrar (Section 31(2)(b) of the Act).

This is consistent with the penalties imposed for similar or equivalent offences in other ACRA-administered legislation, such as the Companies Act.

A complete list of the key amendments is set out on the ACRA media release.

Written by Mindy Ng.
Please contact Mindy Ng at MNg@selvam.com.sg for more information.

The content of this update is of general interest and is not intended to apply to specific circumstances. The content should not therefore, be regarded as constituting legal advice and should not be relied on as such.