Speech by Mr. Louis Ng Kok Kwang, MP for Nee Soon GRC at the Second Reading of the Limited Liability Partnerships (Amendment) Bill [Bill No. 14/2017]
Madam, this Bill, viewed together with the Companies (Amendment) Bill, displays our government’s efforts to make continual improvements to our business regulatory landscape – and I stand in support of it.
The Bill allows our businesses to continue operating with minimal costs while adhering to statutory requirements, and ensures that our regulatory regime keeps up with the times.
Praise for the high level of stakeholder engagement for the Bill
I note that a public consultation on the proposed changes for companies and Limited Liability Partnerships (LLPs) was held via REACH.
A detailed summary of feedback received was also published online, and MOF and ACRA even went as far as to publish the corresponding responses to each category of feedback.
This high level of stakeholder engagement is a welcomed initiative and I would like to commend this effort. I am also heartened by the fact that many of the proposals from the public were taken into serious consideration, resulting in some amendments to the Bill.
As I mentioned in my Budget Speech, I believe there is merit in greater engagement with stakeholders before the proposal of each Bill. We should always listen to feedback, spot gaps, and co-develop solutions with the community.
I would like to seek a few clarifications with regard to this Bill.
Streamlining regulatory fee structure
Firstly, I have spoken to members of the business community and many have welcomed the removal of the common seal. This is a positive step to reduce auxiliary costs of doing business in Singapore.
Today, we are able to use cheaper alternative methods – such as electronic signatures sent with official emails – to ensure the authenticity of documents.
Moving forward, I would like to ask if the Ministry would be conducting a thorough review to identify, and subsequently remove similar non-essential costs when incorporating businesses.
For example, will ACRA be doing another round of review to streamline regulatory fee structure? Considering that the last review was done more than 2 years ago, it would be timely to conduct another one soon.
This will go a long way in supporting entrepreneurs and start-ups, as they can then allocate resources to essential needs.
Retaining the records of wound-up LLPs
Secondly, we are extending the period for which the liquidator of a LLP that is wound up must keep the books and papers of the LLP from a minimum of 2 years to a minimum of 5 years.
This will improve transparency and enhance confidence in our regulatory environment, as creditors, accountants and other stakeholders will have a longer period of access to key business documents.
I also applaud the removal of option for LLPs to destroy records early if they are wound up by partners or creditors. This prevents the destruction of potential evidence of fraudulent business practices.
However, a longer period of retention will result in higher costs of storage for businesses. This cost will have to be borne by owners of businesses, and it is important to ensure that it is kept within reasonable limits.
The higher costs could also mean that when company assets are rounded up, creditors end up with less – which might be unfair to them.
In this regard, is the Ministry exploring more cost-effective means of technology to ensure the retention of key documents of the wound-up LLPs?
In addition, why is the retention period increased to 5 years? I would like to ask how we have determined 5 years to be the optimal period of retention. I note that for the retention of books and papers after a company has been struck off, we are similarly increasing the period to 5 years.
Madam, these comments notwithstanding, this Bill assures businesses operating in Singapore that the government will do all it can to protect their interests, and I stand in support of it.