JTJB Legal Update September 2017
In the case of Re Asia Petan Organisation Pte Ltd  SGHC 204, the Singapore High Court clarified the ambit of the Court’s power to restore a company which had been struck off the Register.
Asia Petan Organisation Pte Ltd (“Company”) was incorporated in Singapore in July 2013, with Song and Tan as the 2 directors and shareholders. A few months into business, Tan lodged an application to strike the Company off the Register and prepared the relevant documents for striking off which he forwarded to Song to execute. When Song did not respond, Tan proceeded to lodge the application for striking off on 23rd June 2015.
Subsequent to the Company being struck off, Song made an application to Court to restore the Company pursuant to Section 344(5) of the Companies Act (“CA”). Song’s position was that he had only come to realise that the Company had been struck off in November 2015.
Song argued that there were grounds to believe that Tan had breached his directors’ duties to the Company and that the Company should be restored so that an action could be commenced against Tan. Tan argued, among other things, that there was no provision in the CA that allowed the Court to restore a company which had been struck off on its own application.
The Court held that it did have the power under Section 344(5) to order the restoration of a company which has been struck off on its own application if the necessary conditions are met, whether pursuant to Section 344 or the new Section 344A of the CA. In granting Song’s application, the Court found that in order for a Company to bring a claim, it must be in existence.
The requirement of the Company being in existence so as to bring the derivative action that Song intended, rendered restoration necessary.
The Court also provided helpful guidance on the factors to be considered when determining whether restoration should be granted: –
- Section 344(5) of the CA should be interpreted broadly.
- In order to demonstrate locus standi, a person must demonstrate some proprietary or pecuniary interest arising from the company’s restoration. Such an interest need not be firmly established or highly likely to prevail, but it must not be merely shadowy.
- When considering whether it is “just” to restore a company to the Registrar, a Court has to have regard to all circumstances of the case including but not limited to:
- The purpose of restoring the company;
- Whether there would be any practical benefit arising from the restoration; and
- Whether there would be prejudice to any persons.
Chin Jia Yi