From 6 May 2026, the maximum fine for breaching director duties under Singapore's Companies Act quadrupled from S$5,000 to S$20,000.
For serious offences, imprisonment of up to 12 months may also apply. These are personal penalties. They sit on the individual director, not the company.
For most founders running a Singapore SME, the line between being a director, a shareholder, and the day-to-day manager is often invisible. You make the decisions, you sign the documents, you handle the operations. That overlap is exactly what the new framework is designed to reach.
The Corporate and Accounting Laws (Amendment) Act 2025, passed by Parliament on 5 November 2025, commenced its first tranche of provisions on 6 May 2026. The headline shift for founder-directors is straightforward: heavier personal penalties for breach of director duties.
What the new penalties look like
The maximum fine for breaches of fundamental director duties has risen from S$5,000 to S$20,000. Serious offences may attract both a fine and imprisonment of up to 12 months. For nominee director breaches and anti-money-laundering failings, fines can reach S$100,000.
The duties themselves have not changed in substance. Directors are still required to act in the company's best interests, exercise reasonable diligence, avoid conflicts of interest, and ensure proper statutory filings. What has changed is the consequence of falling short.
Why this matters more for SMEs than it might appear
In the SME setting, governance can quietly drift. Filings are made late because the director was travelling. A related-party transaction goes through without formal documentation because everyone already knew about it. A loan is taken from a friend without proper disclosure. Each of these, individually, looks small. Under the new framework, each can become a personal liability for the director who signed off, or who should have asked the question.
ACRA's position is also clear that delegation does not shift the duty. If your corporate secretary, accountant, or tax agent makes a filing mistake on your behalf, you as director remain accountable. "Reasonable diligence" includes reviewing what is being filed in your name.
Does a D&O policy cover the new director penalties in Singapore?
Directors & Officers (D&O) Liability insurance is built precisely for this kind of personal exposure. A properly structured D&O policy responds to defence costs when a director is investigated, sued, or charged. It covers personal liability arising from alleged breaches of duty where the company cannot or will not indemnify, regulatory enquiries from ACRA, MAS, MOM, or IRAS, and claims from shareholders, creditors, or other stakeholders.
For SMEs, defence costs are often the most useful element. Even when a director is ultimately found to have acted correctly, the legal costs of getting to that conclusion can be substantial. D&O cover meets those costs from the moment a notice is received, not only after liability is established.
What we would suggest reviewing now
Start with your filing calendar. Confirm it covers all ACRA, IRAS, and MOM deadlines, with named responsibility for each. Then read through your existing D&O policy and check the limit, the definition of "insured persons," and whether regulatory enquiry costs are included. If you do not have D&O cover at all, this is a reasonable moment to consider whether the exposure warrants it.
The new penalties are not designed to catch out well-run businesses.
They are designed to raise the floor of governance across Singapore companies. For founders who have been diligent, the practical change is small. For those who have treated compliance as a year-end administrative task, the change is significant. We would be glad to talk through where you sit, and whether your current setup matches your current exposure.
This article provides general information only. It is not insurance advice. Policy availability, terms, conditions, and exclusions vary by insurer and product, and cover is subject to the full policy wording. Please contact TZY CO for advice on your specific situation.