What is a de facto director?

A de facto director is a person who is not formally appointed to the company’s board as a director but is acting as if he had been so.

To formally appoint a director, typically a general meeting must be convened and the shareholders have to pass a resolution to appoint an individual as a director. After the resolution has been passed, usually the company secretary would be the one to make the changes, i.e. add the director, to the company via Bizfile+.

In this case, a de facto director would not have gone through this formal process. However, this person would still be acting as though they had been so. This can be seen when an individual takes on duties and responsibilities that would normally be taken up by the directors of the company.

Under section 4 (1) of the Companies Act, a director includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors or the majority of the directors of a corporation are accustomed to act and an alternate or substitute director.

Thus even though the de facto director is not listed in the formal company documents or has never been formally appointed, this section of the Companies Act binds the de facto director to duties, responsibilities and conduct which can be expected of a director of a company.

When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.

Yours Sincerely,
The editorial team at Singapore Secretary Services

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