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Legal Updates

Legal Updates for March 2024

Key Legislative Changes to Align Regulatory Regimes for BTs with Companies and REITs From 12 March 2024
The Business Trusts (Amendment) Act 2022 ("Amendment Act") contains changes to the Business Trusts Act 2004 ("BTA") which governs the registration and regulation of registered business trusts ("BTs"). Since the BTA came into effect, there have been various amendments to the Companies Act 1967 ("CA") to improve the regulatory regime for companies. As such, the Amendment Act introduces changes to amend the BTA to align with certain corresponding provisions in the CA to improve the regulatory regime for BTs. Changes under the Amendment Act will be implemented in two phases. Phase 1 amendments came into effect on 12 March 2024 and phase 2 amendments will be implemented concurrently with supporting subsidiary legislation. The Monetary Authority of Singapore intends to consult on supporting legislation for phase 2 amendments in Q2 2024, targeting implementation in Q4 2024. This Update gives a snapshot of salient key amendments to the BTA that came into force on 12 March 2024.

Ratification – Not Always a Magic Bullet
Modern day commercial transactions are typically executed by agents (usually, directors) on behalf of their principals. Where an agent’s act is not authorised by the principal, a valid ratification retrospectively authorises the agent to enter into the transaction. Yet ratification is not always a magic bullet. There are parameters to a principal’s power to ratify. Among others, can a principal ratify a contract in which it is expressly named as a party, even though it did not know about the contract at the time a litigation on the contract started?

The team of Gregory Vijayendran SC, Lester Chua and Tomoyuki Lewis Ban from Rajah & Tann Singapore LLP’s Commercial Litigation Practice Group successfully represented the respondents in resisting an appeal before Singapore’s apex court in Alternative Advisors Investments Pte Ltd v. Asidokona Mining Resources Pte Ltd anor [2024] SGCA 3. In this recent case, the dispute involved the issue of whether certain loan documents and deeds of assignment were valid, in circumstances where the purported principal was not aware of the agreements at the time the claim was initiated, and where the agent had not purported to act on the purported principal’s behalf when executing the agreements. The Court of Appeal held that the alleged ratification of the agreements was invalid.

The team from Rajah & Tann was instructed by M&A Law Corporation. This Update elucidates the key considerations that the Court of Appeal took into account in dismissing the appeal.

Consultation on Amendments to Enhance Beneficial Ownership Transparency and the Regulatory Regime for Corporate Service Providers
On 12 March 2024, the Ministry of Finance and the Accounting and Corporate Regulatory Authority jointly issued a consultation on the following draft bills:

  • The draft Companies and Limited Liability Partnerships (Miscellaneous Amendments) Bill, which seeks to enhance the transparency of beneficial ownership of companies and limited liability partnerships; and
  • The new draft Corporate Service Providers Bill, which seeks to enhance the regulatory regime for the Corporate Service Providers sector.
The consultation ends on 25 March 2024. This Update provides a summary of the key amendments introduced by the draft bills.

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