20. Power to refuse registration Flashcards
- Power to refuse registration
General overview
[20.01] This section defines the scope of the registrar’s powers to register a company. Registration of a company is of right and not a discretion except in respect of the registration of a proposed company where the constitution is likely to be used for an unlawful purpose or purposes prejudicial to the public peace, welfare or good order in Singapore, or where it would be contrary to the national security or interest. The registrar does exercise a quasi-judicial function which is subject to judicial review.
Registration
[20.02] Registration of a company is a ministerial act, and the Registrar of Companies has no discretion to refuse to register a company provided that all the documentation are in order and the requisite fees are paid: R v Registrar of Companies, Ex p Bowen [1914] 3 KB 1161 . A solicitor was allowed to recover the registration fees from the company but not the costs of preparation of the company’s memorandum and articles because the company was under a statutory liability to pay the registration fees
Registration is a matter of right
[20.03] In other words, registration is allowed as a matter of right and not discretion. This function of the registrar has been described as a quasi-judicial function. Only in the circumstance of misconduct or great carelessness on the part of the registrar would a company with objects wholly illegal (in this instance the denial of Christianity) obtain registration: Bowman v Secular Society [1917] AC 406, HL . Even though the objects may be illegal, the company may apply its funds or enter into a contract for a lawful purpose or wind up voluntarily. Where there are surplus assets and no lawful manner of applying it, upon dissolution of the company, it belongs to the Crown as bona vacantia: Cuunnack v Edwards [1896] 2 Ch 679 . The purpose of the Act is to protect the public in the sense that they need not go behind the registration to ascertain that all the requirements of the Act had been complied with
Power to refuse registration
[20.04] The Registrar of Companies shall refuse to register the constitution of a proposed company where he is satisfied that: (a) the proposed company is likely to be used for an unlawful purpose or for purposes prejudicial to public peace, welfare or good order in Singapore; or (b) where it would be contrary to the national security or interest. Any person aggrieved by the decision of the registrar may appeal to the Minister within 30 days of the date of the decision under subsection (3). The registrar’s decision may be subject to judicial review at the suit of the Attorney General: R v Registrar of Companies, Ex p AG [1991] BCLC 476 .
[20.05] The registrar refused to register a company formed to sell tickets in an Irish lottery. The Court of Appeal upheld the registrar’s decision to refuse registration as the lottery was illegal in England: R v Registrar of Joint Stock Companies, Ex p More [1931] 2 KB 197, CA . Companies established for immoral purposes such as prostitution shall not be registered, even though prostitution is not an offence in England: R v Registrar of Companies, Ex p AG (above).
[20.06] The words “rule of law” in subsection (2) would in all likelihood refer to the common law rather than other written law. An example of a written law that prohibits the incorporation and registration of the company is the Multi-Level Marketing and Pyramid Selling (Prohibition) Act (Cap 190).
Effect of certificate of incorporation
- cannot be challenged
[20.07] Registration does not establish conclusively that the objects of the company are lawful, but after the issue of a certification of incorporation the regularity of the incorporation cannot be challenged on the grounds of illegality except in proceedings specially brought in the name of the Crown to have the registration cancelled: Bowman v Secular Society [1917] AC 406, HL . The court may also go behind the veil of incorporation to determine whether the company is to be characterised as an enemy in time of war: see Daimler Co Ltd v Continental Tyre and Rubber Co (Great Britain) Ltd [1916] 2 AC 307, HL , where the shareholders were mostly resident in Germany, and all the directors that resided in Germany could not bring an action to recover a debt when a state of war existed between England and Germany. The effect of s 8C(4) of the Limited Partnerships Act 1907 (UK), is that the certificate of registration of a limited partnership issued by the Registrar of Companies is conclusive evidence that a limited partnership came into existence on the date of registration, even if the registration was procured by fraud or forgery: see Bank of Beirut SAL & Anor v HRH Prince Adel El-Hashemite & Anor; Arab National Bank v HRH Prince Adel El-Hashemite & Anor [2015] EWHC 1451; [2015] 3 WLR 875, Ch D. The same principle would likely apply to a certificate of incorporation issued in respect of a company.
