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How to successfully implement legal tech into in-house legal teams

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The emergence of Legal Tech, or LawTech, represents a significant shift in the legal profession, mirroring the impact of FinTech on the financial industry.

Improving technology remains a top priority for legal firms, particularly in-house legal teams. This deep dive addresses questions about Legal Tech and its implementation.

Legal tech, not to be confused with legal for tech, refers to a suite of technologies designed to support, supplement, or outright replace traditional methods for delivering legal services and improving operational efficiency.

The Solicitors Regulation Authority (SRA) has recognised legal tech potential to revolutionise the legal landscape, offering parallels to the FinTech revolution in finance.

With the market already worth an estimated $28 billion in 2022 and expected to grow, legal tech’s scope for expansion and innovation is vast.

The integration of legal tech offers many benefits to the legal industry.

Efficiency gains

One of the most significant advantages of legal tech is its ability to streamline operations. It automates routine tasks such as searching for contract terms or generating timelines, reduces the administrative burden on legal professionals, and frees up their time to focus on more complex and strategic activities.

Zegal, for instance, provides comprehensive solutions that encapsulate this efficiency through its platform, making legal processes more manageable and less time-consuming.

Enhancing transparency

The legal sector has historically been perceived as opaque, relying on complex jargon and processes.

Legal tech, however, is at the forefront of shifting this perception by offering user-friendly solutions that demystify legal processes. Platforms like Zegal play a pivotal role in this transformation, providing tools that promote clarity and understanding, thereby improving the overall quality of legal services.

Certainty and risk mitigation

Digitising legal processes through tech solutions significantly reduces the risk of human error and the loss of critical documents. Automated contract management systems will ensure that every piece of due diligence is accounted for, safeguarding against potential oversights.

Security enhancements

Data breaches are a constant threat, but legal tech offers robust security solutions, such as digital signatures and encrypted data rooms. These technologies secure sensitive legal documents and build trust with clients.

Despite its advantages, the adoption of legal tech is challenging. Initial barriers often include:

Funding constraints

One of the primary obstacles to legal tech adoption is the initial investment required. Legal technologies, especially sophisticated solutions like AI-powered contract analysis tools or comprehensive case management systems, can be expensive.

Strategies for overcoming funding constraints:

  • Cost-benefit analysis: Conduct a thorough cost-benefit analysis to understand the long-term savings and efficiency gains against the upfront costs. Demonstrating a clear ROI can help in securing budget approval.
  • Phased implementation: Consider a phased approach to adopting legal tech, starting with more affordable solutions to demonstrate value before investing in more expensive technologies.
  • Seek external funding: Explore options for external financing, such as grants, legal innovation funds, or partnerships with legal tech providers, which may offer favourable terms for new adopters.

A lack of tech literacy

The successful adoption of legal tech also hinges on the tech literacy of the legal team. A lack of familiarity with new technologies can slow down or even halt integration.

Strategies for enhancing tech literacy:

  • Tailored training programs: Implement comprehensive training programs designed to bring staff up to speed on the new systems. Consider leveraging the training modules provided by tech vendors.
  • Hiring tech-savvy staff: Enrich your team with professionals who can champion legal tech adoption and support their colleagues through the transition.
  • Encourage continuous learning: Foster an organisational culture that values continuous learning and innovation. Provide opportunities for staff to engage with new technologies through workshops, seminars, and conferences.

Resistance to change within organisations

Resistance to change is a natural human instinct, especially in traditional professions such as the legal industry. Concerns over job security, a preference for established ways of working, and scepticism about the effectiveness of new tools can all contribute to resistance.

Strategies for managing resistance to change:

  • Communicate benefits clearly: Ensure that the benefits of legal tech are communicated to all stakeholders. Highlight how it can alleviate burdensome tasks, allowing legal professionals to focus on higher-value work.
  • Involve teams in the selection process: Engage potential users in decision-making. Allowing them to have a say in selecting legal tech tools increases buy-in and reduces resistance.
  • Success stories and pilot programs: Share success stories and case studies from other organisations that have successfully adopted legal tech. Consider running a pilot program to demonstrate the technology’s practical benefits before a full rollout.

Overcoming these obstacles requires comprehensive planning, prioritisation, and the proper support to ensure legal teams can effectively integrate legal tech into their workflows.

Selecting the right tools

The selection process is crucial to overcoming potential resistance to new technologies. Involving employees at all levels in choosing the right tools ensures buy-in and identifies solutions that address the most pressing needs.

Effective implementation

Beyond selection, successful implementation hinges on thorough training and engagement. Custom-built tools and platforms require a deep understanding to be used to their full potential, underscoring the importance of comprehensive onboarding processes.

Ongoing support and evolution

The fast-paced nature of technology means that legal tech solutions require regular updates and feedback to remain effective. Engaging with service providers like Zegal ensures that legal teams have continuous support and access to the latest advancements in legal tech.

Legal templates, from NDA templates to shareholder agreements, are among the most transformative tools available to in-house legal teams. They serve as a foundational element for swiftly creating consistent, compliant, and professionally structured documents.

By starting with a template, legal professionals can significantly reduce the time and effort involved in drafting documents from scratch and ensure that all necessary legal and regulatory provisions are included.

  • Efficiency and time savings: Legal templates streamline document creation, allowing legal teams to produce necessary documents much faster than traditional methods. This efficiency frees up time for legal professionals to focus on more strategic tasks.
  • Consistency and compliance: Templates provide a standardised format that ensures consistency across all documents. Moreover, because templates can be updated to reflect the latest legal requirements, they help maintain compliance with current laws and regulations.
  • Reduced risk of errors: Using a pre-vetted legal template minimises the risk of omitting crucial clauses or incorporating outdated legal language, reducing the likelihood of contractual disputes or compliance issues.
  • Accessibility for non-legal professionals: Legal templates demystify the document creation process for individuals without legal training, making it easier for other departments to draft preliminary documents without immediate legal input.

Customisation and flexibility

While templates offer a solid starting point, customisation is vital to ensuring that each document accurately reflects the specific needs and circumstances of the transaction or matter at hand.

Zegal grants users access to various legal templates and customises them to suit their unique requirements. This flexibility allows for creating legally sound documents that are perfectly tailored to the specific context in which they will be used.

Integrating legal templates into the daily operations of an in-house legal team involves several steps:

  1. Template selection: Begin by identifying the most commonly used documents within your organisation and selecting templates for these documents as your starting point.
  2. Customisation process: Use platforms like Zegal to customise these templates, ensuring they align with your organisation’s legal and operational requirements.
  3. Review and approval: Establish a review process for customised templates to ensure they meet legal standards and receive approval from senior legal team members.
  4. Training and access: Provide training for the legal team and relevant non-legal staff on accessing and using these templates. Ensure everyone understands the importance of sticking to approved templates to maintain consistency and compliance.
  5. Ongoing updates: Review and update the templates regularly to reflect any changes in law, regulation, or company policy, maintaining a cycle of continuous improvement.

The role of Zegal

Platforms like Zegal play a crucial role in this process, providing a repository of legal templates and a comprehensive legal document management environment.

With features that support customisation, collaboration, and electronic signature, Zegal offers a holistic solution for leveraging legal templates effectively within in-house legal teams.

The platform facilitates the drafting and customisation of documents, their execution, and storage, creating a streamlined workflow from start to finish.

Contract automation

Contract automation stands out as a transformative solution for in-house legal teams. This technology harnesses the power of legal tech to simplify and accelerate the contract lifecycle, from initial drafting to final approval and execution.

Integrating contract automation into legal departments’ processes can achieve unparalleled efficiency, accuracy, and operational agility. 

Understanding contract automation

Contract automation involves using software to automate legal contract creation, negotiation, approval, and management. This technology leverages pre-defined templates and rules to generate contracts, streamlines the review and editing process through collaborative tools, and often includes digital signing capabilities to expedite execution.

The ultimate goal of contract automation is to minimise manual tasks, reduce the risk of human error, and shorten contract cycles.

Key benefits of contract automation

  • Increased efficiency: Automating repetitive tasks and utilising templates for standard agreements drastically reduces the time required to produce contracts. This efficiency allows legal teams to focus on more strategic aspects of their roles, such as risk management and compliance.
  • Enhanced accuracy: By standardising contract creation, automation reduces the likelihood of errors and inconsistencies. This ensures all contracts comply with current laws and company policies, mitigating legal risks.
  • Improved collaboration: Contract automation platforms often feature tools that enable real-time editing, commenting, and version control. This fosters better communication between legal teams, stakeholders, and external parties, facilitating smoother negotiations and faster consensus.
  • Streamlined approval processes: Automated workflows can route contracts to the appropriate parties for review and approval, ensuring that no time is wasted and all necessary checks are in place before a contract is executed.
  • Easier contract management and retrieval: Storing contracts in a centralised digital repository makes managing and retrieving documents more accessible. Advanced search capabilities and tagging mean users can quickly find specific contracts or clauses as needed.

Implementing contract automation with Zegal

Zegal is at the forefront of contract automation, offering robust solutions designed to integrate seamlessly with the workflows of in-house legal teams. Here’s how organisations can leverage Zegal for effective contract automation:

  1. Template customisation: Customise legal templates within Zegal for your most frequently used agreements. This ensures that your automated contracts align with legal and business requirements.
  2. Workflow design: Utilise Zegal’s workflow design features to establish automated processes for contract review, approval, and execution. This includes setting up notifications and reminders to keep contracts moving efficiently through the pipeline.
  3. Collaboration and negotiation: Use Zegal’s collaborative tools to negotiate contract terms directly within the platform. This speeds up the negotiation process and maintains a clear audit trail of changes and discussions.
  4. Digital execution: Leverage Zegal’s electronic signature capabilities to enable parties to sign contracts digitally, further reducing turnaround times and facilitating remote transactions.
  5. Contract management: Finally, use Zegal to store and manage completed contracts. The platform’s robust search and management features make it easy to keep track of contractual obligations, renewal dates, and compliance requirements.

The impact of contract automation

The impact of contract automation on in-house legal teams cannot be overstated. Freeing legal professionals from time-consuming administrative tasks allows them to devote more energy to strategic decision-making, risk assessment, and proactive legal counselling. 

Moreover, contract automation’s enhanced speed and agility enable businesses to respond more quickly to market changes, secure deals faster, and maintain a competitive edge.

Speeding up contract execution with bulk e-signing

Bulk e-signing is a groundbreaking feature of modern legal technology, redefining the efficiency and scalability of executing contracts and legal documents.

As businesses grow and the volume of contracts increases, a streamlined, secure, and time-saving document signing becomes paramount. 

The essence of e-signing

Bulk e-signing allows multiple documents to be signed electronically by one or more signatories in a single action. This technology bypasses the traditional, cumbersome process of signing legal documents individually, offering a seamless and expedited path to document execution.

By integrating bulk e-signing into their workflows, legal teams and businesses can significantly accelerate the contract execution phase, ensuring legal agreements are finalised promptly and efficiently.

Advantages of bulk e-signing

  • Enhanced efficiency: Bulk e-signing reduces the time and effort involved in the signing process. Legal teams can send out dozens or even hundreds of documents for signature in the time it would take to manually process just a few, freeing up valuable time for other tasks.
  • Improved accuracy and compliance: By automating the signing process, bulk e-signing minimises the risk of human error, such as missed signatures or misplaced documents. It ensures that every document is signed correctly and complies with legal requirements, reducing the risk of disputes or compliance issues.
  • Scalability: As organisations grow, so does the volume of contracts and legal documents requiring signatures. Bulk e-signing scales effortlessly to meet increasing demands, making it an ideal solution for businesses of all sizes.
  • Cost reduction: Bulk e-signing eliminates the need for physical document handling, including printing, mailing, and storing paper documents. This reduces direct costs and contributes to environmental sustainability by decreasing paper use.
  • Enhanced security: Digital signatures used in bulk e-signing are encrypted, providing higher security than traditional signatures. They also include a tamper-evident seal and an audit trail, ensuring the integrity and authenticity of signed documents.

Implementing bulk e-signing with Zegal

Zegal’s platform offers robust bulk e-signing capabilities designed to integrate seamlessly with the needs of modern businesses and legal teams. Here’s how to leverage Zegal for efficient bulk e-signing:

  1. Document preparation: Start by preparing the documents that require signatures, using Zegal’s template library and customisation tools to ensure they meet your specific needs.
  2. Signatory identification: Identify the parties required to sign each document. Zegal allows for flexible signatory assignments, accommodating various signing scenarios and hierarchies.
  3. Bulk sending: Upload and send multiple documents for signature in a single batch. Zegal’s intuitive interface simplifies this process, guiding users through each step.
  4. Tracking and management: Use Zegal’s tracking features to monitor each document’s status in real-time. Receive notifications as documents are signed and easily follow up on outstanding signatures.
  5. Secure storage: After signing documents, they are automatically stored in Zegal’s secure, cloud-based repository. This facilitates easy access and management of executed contracts.

Bulk e-signing is not just a feature; it’s a strategic tool that propels businesses into the future of digital contract execution. Its adoption signifies a commitment to operational excellence, leveraging technology to streamline processes, enhance compliance, and drive business growth. 

As legal tech advances, bulk e-signing stands out as a critical enabler of efficiency and scalability in the digital age.

The integration of legal tech represents a forward-thinking approach to legal practice, offering unparalleled benefits in efficiency, security, and accessibility.

While the path to full integration may present challenges, the strategic application of resources, careful planning, and support

Platforms like Zegal play a crucial role in this process, providing a repository of legal templates and a comprehensive legal document management environment.

With features that support customisation, collaboration, and electronic signature, Zegal offers a holistic solution for leveraging legal templates effectively within in-house legal teams. 

How does Share Vesting work?

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Share vesting is when a company gives its equity to its employees or consultants to keep them with the company and incentivize them to reach established performance goals.

You will likely find your share options in your Employment Contract, and they are often used when a senior employee or an important advisor or consultant comes on board.

What are vesting shares?

Share vesting means the company gives its shares to an individual upfront, and the shares are subject to the company’s right to repurchase them.

These shares are known as unvested shares. The buyback right extinguishes over time (or upon fulfilment of certain conditions).

Shares released from this buyback right are known as vested shares. This mechanism is sometimes known as reverse vesting, as opposed to the grant of a share option, which is forward vesting.

Share vesting enables a senior employee or an advisor to have equity immediately upon coming on board. However, the company still retains control over those shares by way of a right to buy back, and, in this way, the company keeps the employee or advisor on board until the end of the vesting period. 

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How share vesting works

Step 1: Check your company’s Articles of Association/Constitution

Check if the company’s constitutional document restricts the buyback of its shares.

If it does, you may build in some appropriate mechanisms in your Share Vesting Agreement or consider another form of rewarding your team (for example, a Share Option Plan).

Step 2: Create a Share Vesting Agreement

Create and sign the Share Vesting Agreement. After signing, the following will take place:

  1. The employee/consultant pays for the shares on the “Purchase Date” that you set in the agreement;
  2. On the Purchase Date, the company secretary issues share certificates in the name of the employee/consultant, and he then becomes a company shareholder. The number of the share certificates and the number of shares covered by each certificate should match the vesting schedule;
  3. The employee/consultant signs a document known as a “Share Power” and delivers this document to the company secretary;
  4. The company secretary keeps the share certificates in the name of the employee/consultant and the Share Power in escrow; and
  5. When shares are vested (i.e. released from the company’s right to buy back) according to the terms of the Share Vesting Agreement, the share certificate in respect of that part of the shares will be delivered by the company secretary to the employee/consultant.

Step 3: The share recipient pays for the shares and signs the Share Power Agreement

The employee/consultant pays for the shares on the “Purchase Date” you set in the agreement.

In addition, the employee/consultant signs a “Share Power” and delivers this document to the company secretary.

Step 4: The company secretary issues and holds on to the share certificates

On the Purchase Date, the company secretary issues share certificates in the name of the employee/consultant, who then becomes a company shareholder.

The number of share certificates and shares covered by each certificate should match the vesting schedule.

The company secretary keeps the share certificates in the name of the employee/consultant and the Share Power in escrow.

Optional: Exercise of the buyback right

If the employee/consultant leaves the company, any unvested shares will be subject to the company’s right to buyback.

The company may exercise its buyback right for three months after the employee/consultant leaves. The buyback right is deemed to be automatically exercised by the company upon the expiry of the three months.

This is unless the company notifies the employee/consultant that it does not intend to exercise the buyback right.

If and when the company exercises the buyback right, the company needs to pay the buyback price for the shares (the same price that the employee/consultant paid for the shares in the first place) to the employee/consultant.

Following this, the company secretary takes the necessary steps to make the transfer effective.

After the buyback, under Hong Kong and Singapore law, those shares will be regarded as cancelled. Ensure the company secretary files with the Companies Registry/ACRA within the applicable statutory timeframe after the share buyback.

Optional: Exercise of the call option

When creating the Share Vesting Agreement, you may opt for a “call option” to be put in place. This call option enables the company to do one of two things:

  1. Buyback all vested shares at fair value; or
  2. Convert all vested shares to non-voting shares (i.e. the employee/consultant, being the holder of the vested shares, can still receive dividends from the company but has no say in the company’s decision-making).

The company may exercise the call option for six months after the employee/consultant leaves the company.

Share Options vs Share Vesting

In a nutshell:

  1. 1st Step: A company’s board of directors will grant share options to key employees (beneficiaries of an Employee Share Option Plan or ESOP).
  2. 2nd Step – The exercise of those share options is conditional upon completing pre-set conditions.
  3. 3rd Step—Share vesting occurs upon the completion of all pre-set conditions: new shares are allotted, or existing shares are transferred to the beneficiaries.

In detail:

Share options are meant to create incentives for the key/senior employees or executives (directors) to stay in the company and increase profitability. Employees holding share options will be motivated to increase the value of their shares and will eventually enable long-term value creation.

A share option plan ultimately aligns the interests of the employees with those of the shareholders and the management, creating a shared stake in the company’s results. It represents a significant step toward a company’s better corporate governance.

A clear understanding of the basic option terms is essential for drafting the detailed terms of a share option plan.

The summary below will provide some guidance towards the mechanisms of a share option scheme, where share grant options limit a private company.

Share options

A share option gives an employee the right to access the company’s share capital in the future. When an employee owns a share option, it is crucial to remember that he/she does not yet own any share in the company. 

The mechanism of a share option is similar to that of a call option as it gives its holder the right to buy shares at a pre-determined price only if certain conditions are met.

An option is a right and not an obligation, meaning the employee cannot be forced to purchase the shares. On the other hand, by granting share options to an employee, the company undertakes to issue the said shares upon satisfaction of the pre-determined conditions and exercise of the options by the employee.

What does a company grant when granting share options? A share option gives conditional access to one or several share(s) of the company. A share option does not grant the employee any of the rights attached to shares, which means that the employee is only entitled to participate in general meetings or to receive dividends once the shares are effectively allotted.

Share options are generally granted for free and cannot be transferred nor sold to other persons by the grantee.

Share vesting

As a share option plan is generally conditional upon the employee satisfying several pre-set conditions or upon the occurrence of pre-set events, the share vesting is the acquisition of the actual right to exercise the options.

ZEGAL SEES HUGE CUSTOMER GROWTH IN THE UK

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small business

Zegal, the end-to-end legal platform for small businesses, launched in Australasia, sees tremendous growth in the UK. 

LONDON, UK, 20 June, 2021 —Increasing small business demand for online end-to-end legal services in the UK has Zegal rapidly expanding its team and product range. 

Small businesses in the UK, well-versed in using cloud accounting services like Xero with their accountants, are demanding the same and more from their legal advisors.  Enter Zegal.  The Zegal platform, which is used across Australia and Asia by more than 20,000 smaller companies and their legal advisors, has seen tremendous growth in the UK as businesses adapt to work-from-home offices.

Zegal is designed to be end-to-end—enabling companies to do legal work that is more complex. Zegal’s sophisticated software is the core of the experience, providing the technology for businesses to work alone; or together with good old fashioned real-life lawyers, working virtually through the platform, whenever needed.  The result is streamlined and affordable legals.

As a global Software as a Service (SaaS) company, Zegal was built for the cloud and is an example of how technology companies are providing significant opportunities to small businesses the world over by leveraging the benefits of scale and leveling the playing field.  Zegal recently announced a collaboration with British leading virtual law firm 360 Business Law, selected by Zegal to deliver legal advice to its UK clients. Clients using Zegal’s contract management application can now access a free 30-minute consultation with a lawyer at 360 Business Law.

Daniel Walker, Zegal Founder says, ‘The transition we’ve seen from office to remote working has driven a huge demand in the UK market for virtual legal counsel and platform solutions. We are seeing the strongest demand within the mid-market space, which is a very exciting opportunity.’  

For more information and/or interview requests please contact Alicia Walker at alicia.walker@zegal.com 

 

Linkedin | Facebook | www.zegal.com 

ABOUT ZEGAL

Zegal is the end-to-end platform for the legals smaller companies need. 

Our story

Zegal was founded in 2014 by lawyer friends Daniel Walker and Jake Fisch. Having been a part of the system that preserves quality legal advice only for those that can afford it, the two were determined to build a model that delivers the ‘corporate law firm’ experience to small business.

Today Zegal is the world’s only end-to-end platform for smaller companies to create, negotiate, and sign both the simple, and complex contracts they need to run their business, with expert legal advice, 100% online every step of the way. Since our launch, we have helped more than 20,000 companies close commercial contracts, run leaner HR teams, and enter new markets. You can use Zegal for your company in the UK, Australia and across Asia. Make your legals simple.

 

This article does not constitute legal advice.

The opinions expressed in the column above represent the author’s own.

Start managing your legal needs with Zegal today

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E-sign Laws: Singapore

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Part 2: Signing in to the digital age

See Part 1: E-sign Laws: Hong Kong

A melting pot for international businesses, Singapore’s presence on the map has been anything but small. The importance of global business transactions for the Singapore economy heightens the need for convenience when conducting business. 

Singapore’s legal framework, with regards to electronic signatures, is also aligned with international legal guidelines by key trading partners who ensure Singapore’s thriving business ecosystem.

The Electronic Transaction Act (ETA) was introduced in 1998 then revised in 2010. It follows a tiered Electronic Transaction scheme. Drawing on the need for convenience and accessibility regardless of physical locations, the ETA knocks down a barrier to entry for engaging in international business activities. 

An electronic signature comes with the equal weightage as a traditional, written or “wet” signature. The legality of signatures, electronic or written, is not compromised regardless of how you are signing a document. 

Read on to learn more about the legal compliance for electronic signatures in Singapore specifically, and watch out for more in this series on Southeast Asia, Hong Kong, China, New Zealand, Australia, UK, Cayman Islands, and BVI.

Singapore’s Electronic Signature Requirements 

The use of electronic signatures is under the compliance of the Electronic Transaction Act (ETA). Singapore also adopts a tiered Electronic Signing scheme.

Use Cases for E-sign

Instances where e-signatures are generally considered appropriate:

  • HR documents, such as new employee onboarding processes including employment contracts, non-disclosure agreements, employee invention agreements, privacy notices, and benefits paperwork 
  • transfers of intellectual property (e.g., copyright assignments and patents)
  • licenses for intellectual property, including patent, copyright, software and trademark
  • commercial agreements between corporate entities, including non-disclosure agreements, invoices, purchase orders, sales agreements and service agreements
  • consumer agreements, including purchase orders, order confirmations, sales terms, services terms,  invoices, shipment documentation, user manuals, and policies

Use Cases Requiring Physical Signature

There are some cases where a handwritten signature will be necessary. These include:

  • Contracts relating to or effecting the disposition of immovable property or an interest in immovable property
  • Wills
  • Declaration of trust or power of attorney
  • Negotiable instruments
  • Promissory notes
  • Documents of title
  • Consignment notes
  • Bills of exchange
  • Bills of lading

The Rules

Secure Electronic Signature

18.—(1)  If, through the application of a specified security procedure, or a commercially reasonable security procedure agreed to by the parties involved, it can be verified that an electronic signature was, at the time it was made —

(a)        unique to the person using it;

(b)        capable of identifying such person;

(c)        created in a manner or using a means under the sole control of the person using it; and

(d)        linked to the electronic record to which it relates in a manner such that if the record was changed the electronic signature would be invalidated, such signature shall be treated as a secure electronic signature.

(2)  Whether a security procedure is commercially reasonable shall be determined in accordance with section 17(2).

Applicability of an Electronic Signature 

Presumptions relating to secure electronic records and signatures

19.—(1)  In any proceedings involving a secure electronic record, it shall be presumed, unless evidence to the contrary is adduced, that the secure electronic record has not been altered since the specific point in time to which the secure status relates.

(2)  In any proceedings involving a secure electronic signature, it shall be presumed, unless evidence to the contrary is adduced, that —

(a)        the secure electronic signature is the signature of the person to whom it correlates; and

(b)        the secure electronic signature was affixed by that person with the intention of signing or approving the electronic record.

(3)  In the absence of a secure electronic record or a secure electronic signature, nothing in this Part shall create any presumption relating to the authenticity and integrity of the electronic record or electronic signature.

In the age of legal technology, it’s important to know the weight of your signature, whether it is through an electronic device or on paper. 

This article does not constitute legal advice.

The opinions expressed in the column above represent the author’s own.

Start managing your legal needs with Zegal today

Read more from the E-Signature Series: Hong Kong, Singapore, Japan, China, Macau, Indonesia, Vietnam, Taiwan

READ MORE: Is e-signing legally binding? 

EBOOK: E-signatures

Company Incorporation Singapore

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Here you’ll find everything you need to know about Company incorporation Singapore.  This article details the various registration requirements, procedures, and a likely timeline for registration in accordance with Singapore’s initial and ongoing regulatory requirements.

What are the Minimum Setup Requirements to Register a Company in Singapore?

  • Shareholder (individual or corporate entity) – 1
  • Resident Director – 1
  • Company Secretary – 1
  • Initial paid-up share capital of at least S$1
  • A Singapore registered office address

Registration Timeline to incorporate a company in Singapore

Over the last decade, the Singapore Registrar of Companies has made a dedicated effort to streamline the incorporation process. As a result, the company registration procedure is now fully-digitized and takes only 2 days (subject to the receipt of complete documents).

Get Started: Company Incorporation Documents

Step 1: Get ACRA’s Approval for Your Company Name

Photo by Hu Chen on Unsplash

ACRA is an organization that will inspect your company name and it also has the authority to approve your company name. You need to propose your company name to ACRA before you do anything else.

The approval process generally comes through in less than an hour, regardless of whether it is approved or rejected; provided it does not contain certain professional words such as “bank”, “finance”, “law”, or “media”. If you have submitted an application for a company name containing these professional words, it may require additional approval from the relevant government authority outside of the Registrar. This will stretch the approval process to several weeks. Your chosen company name must satisfy the following criteria:

Company names must not be:

  • identical to another existing Company Name
  • containing vulgar words
  • similar to established Names or trademarks such as Coca-Cola and Temasek

Company names need to be:

  • unique, meaningful, easy to read
  • free of copyright issues

To register your company name, visit ACRA’s portal: Bizfile

Once the company name is approved, it will be reserved for 60 days from the date of application.

Step 2: Prepare Documents for company incorporation in Singapore

You’ll need to provide:

  • Your company name,
  • A brief description of your business and the scope of its activities,
  • Paid-up capital amount,
  • The particulars of your shareholders,
  • The details of your directors (this includes your mandatory resident director and any additional foreign or local directors),
  • Your registered office address in Singapore, and
  • The particulars of your company secretary,
  • For foreign nationals: Passport copy and proof of overseas residence,
  • A copy of the Singapore identity card for permanent residents or citizens, and
  • Copies of registration documents of the foreign company. This could include a Certificate of Incorporation and Memorandum and Articles of Association, and company extract from the registrar

*If the documents are in a language other than English, an officially endorsed translated copy is required.

register a company in singapore

Step 3: Submit Application to ACRA

Once the relevant documents are signed, filing the incorporation request and receiving approval from the Registrar of Companies can occur in just a few hours after the name is approved. Log in to BizFile+ to submit your application using your SingPass (for first-time registration) to submit the online transaction. To register a SingPass account or check your eligibility for SingPass, visit www.singpass.gov.sg. 

You will need the transaction number of your approved company name application.

Once approval is granted, a registration fee must be paid to the Singapore Registrar of Companies. The fee ranges from S$300 and up depending on the type of entity registered.

Incorporating a Company But Not A Singaporean Resident?

If you are not a Singaporean resident, you should consider the following points:

  • Under Singaporean law, non-resident individuals or corporations are not allowed to self-register a company. So you must find a professional firm to register your company in Singapore.
  • You must get an Employment Pass or Entrepreneur Pass if you are planning to move to Singapore to operate your company. In doing so you can act as the local resident director of your company.
  • If you are operating your company from outside Singapore, you don’t need to have a pass or working visa. However, you will need to find a local director to fulfill the minimum ‘one resident director requirement.
  • All Singapore company incorporation and work permit formalities can be handled without you having to physically visit Singapore – unless you intend to open a bank account at a Singapore-based bank.

    Registering as a Private Limited liability company in Singapore is the best possible choice for foreign companies as it is recognized as a separate legal entity and shareholders are not liable for any debts incurred beyond the share capital already contributed.

    A properly structured Private Limited company enjoys tax efficiencies and few limitations when conducting business in Singapore.

After Incorporation

Once the company has been set up, the following documents will be issued:

  1. Certificate of Incorporation: The Company Registrar will send an email containing a company registration number which is considered the official certificate of incorporation. Although a hard copy is no longer issued as a matter of course, one can be requested online and collected the next business day from the office of the registrar. Requesting a hard copy incurs a fee of S$50. This applies to both subsidiary and branch offices.
  2. Company Business Profile: This is a document containing the particulars of your company and a PDF file of this can be requested for an application fee. The document will be delivered within an hour of making the request.

These two documents are considered to be sufficient for all legal and contractual purposes for conducting business in Singapore including the opening of corporate bank accounts, signing of office leases, subscriptions to telephone/internet services, etc.

Additionally, you’ll need:

  • Share Certificates for each shareholder (only for subsidiary),
  • A company seal (only for subsidiary),
  • A company rubber stamp, and
  • A share register indicating shares allotted (only for subsidiary).

Accounting

Singapore companies need to keep accounting books in order. It means updating general ledgers, accounts payable and account receivables, or fixed asset ledger, etc. And filing of annual financial statements with ACRA in XBRL format.

Annual General Meeting

 Every company must convey its AGM in every calendar year and table its financial statements for the shareholder’s scrutiny.

Corporate Tax

The due dates of company tax filing are 30 November (paper-filing) and 15 December (e-filing).

Annual filing

The Companies Act requires that you perform certain annual filing processes in order to comply with the relevant commercial regulations in Singapore after company incorporation in Singapore. The Annual Returns Filing must occur with a month of its AGM.

Register for Central Provident Fund (CPF)

CPF pension fund scheme in which the employer and employee contribute a percentage of the monthly salary to the fund as a compulsion. Employers must do CPF contribution for Singaporean Employees or permanent residents earning more than S$50 a month CPF contribution for foreign employees is not required.

 

This article does not constitute legal advice.

The opinions expressed in the column above represent the author’s own.

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5 Reasons to Set Up Your Business In Singapore

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Have a business idea and looking for a place to set up business in Singapore?

Recognised globally as one of the most competitive economies and boasting a world-class infrastructure, Singapore is a popular port of call for both aspiring entrepreneurs and experienced business owners. If you are thinking about becoming your own boss, here are some reasons why Singapore might just be the place for you:

1) It’s just so easy to get started in Singapore

Singapore is recognised globally for her strong business potential and dominates several rankings, including coming in second for competitiveness in the Global Report 2015 – 2016 by the World Economic Forum. Aside from a host of attractive tax schemes and incentives, businesses in Singapore also enjoy a corporate tax rate of as low as 17 per cent.

For first-time business owners, the administrative ease of setting up a business here minimises the barrier to entry. Business registration  in Singapore can be completed fully-online with the Bizfile portal. If you are a foreigner looking to start up in Singapore, you may refer to the Ministry of Manpower’s website for your eligibility to apply for work passes, such as the EntrePass. The SME Portal is your all-in-one guide for the essentials of running your business.

Another key advantage for setting up business in Singapore is the availability of an educated, diverse, and multi-cultural talent pool. Singapore is home to a largely bilingual workforce and has been ranked the second most talent-competitive country by the Global Talent Competitive Index for three years in a row.  

2) You will belong to a brilliant community

If you are a tech startup, you’ll be pleased to hear that Singapore has been likened to being the Silicon Valley of Asia. The startup community here is active, vibrant, and close-knit.

Co-working spaces such as The Working Capitol and The Hub and provide flexible and affordable space options for startups and small teams. A hot desk seat in one of these spaces will place you in a community right away and let you network with and learn from fellow entrepreneurs. Still can’t afford it? Look up Technopreneur Circle – completely, 100 per cent, free!

The Singapore government plays a key role in adding to this vibrance, with programmes such as the SG-Innovate that make it easier for entrepreneurs to access mentors and venture capitalists.

Related: How do I know if a VC is right for me?

3) Take your pick with government grants 

A large part of Singapore’s business-friendly regime is due to the abundance of grants and incentives available to Singapore businesses.

Singapore is a very attractive place for entrepreneurs to set up a business. Besides the low tax rates and the ease of doing business, another important factor that attracts entrepreneurs from around the world to the country is the multiplicity of financing sources for startups. 

If you decide to incorporate your startup in Singapore, the Singapore government offers several attractive grants and funding schemes that help grow a business through its various early stages. In addition to the government support, there are many angel investing networks, venture capital firms, private equity firms, startup incubators and accelerator programmes that assist entrepreneurs in raising capital.

4) The legal system protects you

With a reliable and non-corrupt legal system, as well as strong dispute resolution mechanisms in place, Singapore is a safe bet for business looking for a solid Asian base to pave the way for regional expansion.

Aside from political stability, business owners in Singapore also enjoy enhanced protection in her business-friendly environment. For example, Singapore was ranked top in Asia and second in the world for protection of intellectual property (IP) rights according to the World Economic Forum’s (WEF) Global Competitiveness Report 2014 – 2015.

Courts in Singapore offer maximum judicial support of arbitration with minimum intervention, granting parties full and consistent support in the conduct of international arbitration. There is no restriction on foreign law firms engaging in and advising on arbitration in Singapore, which claims lower costs than in almost any other major center of arbitration.

5) Singapore can be expensive, but you can live reasonably cheaply too set up business in Singapore

It comes without doubt that you must consider the standard of living in your host country. Singapore, in contrast with her Southeast Asian neighbours, has experienced rapid economic growth in the fifty years since her independence. Singapore is most known for her quality healthcare and education system, and excellent infrastructure and public transport network. Widely loved is the extensive Mass Rapid Transit (MRT) train network that is planned for continuous development up to 2030, despite being the second-oldest metro system in Southeast Asia reaches.

While many have expressed concern about the high cost of living in Singapore, this can be easily overcome if you are willing to make little sacrifices in your lifestyle choices. A reliable public transport system in a small city like Singapore means daily commute will never be too inconvenient even if you choose to live outside of the city. There are also plenty of third-party service providers that can provide you with a professional serviced office address for incorporation, while you work from home and save on rental costs. Hawker centres and coffee shops serve delicious and affordable local fare, and are usually just a stone’s throw away. “Bluntly speaking, if you expect a high salary, perhaps a startup isn’t the right place for you.”

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How to start a business in Singapore

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The small and bustling city of Singapore prides itself on being business-friendly. Companies that site their international headquarters in Singapore stand to benefit from Singapore’s network of over 50 comprehensive Double Taxation Avoidance Agreements, many free trade agreements (FTAs) and strong intellectual property (IP) laws that ensures protections for your ideas and innovations. Given that Singapore is New Zealand’s sixth top trading partner and Australia’s seventh top trading partner – and the top trading partner in Southeast Asia in both these countries – New Zealand and Australian businesses looking to expand into the region would recognise Singapore as a prime location.

Related reading: 5 Reasons to Set Up Your Business in Singapore

Here, we give you the lowdown on how to start up your business in Singapore.

Registering your business

Registering your business in Singapore is an incredibly convenient process, as all applications can be submitted at BizFile by the Accounting and Corporate Regulatory Authority (ACRA).  ACRC is responsible for incorporating company in Singapore. Simply log into BizFile using your identification and SingPass, Singapore’s online account management for access to all of the government’s e-services. If you are a foreign applicant without a SingPass, you may choose to engage the services of a registered filing agent (e.g. a law firm, accounting firm or corporate secretarial firm).

Decide business structure

Before registering your business, think about the advantages and disadvantages of each type of business structure and determine which best suits your needs. The following business structures are available to you:

  • Sole Proprietorship;
  • Partnership;
  • Company;
  • Limited Liability Partnership;
  • Limited Partnership.

Your choice of business structure will impact your personal liability, paperwork and tax obligations. To learn more about the the differences between the various business structures, check out ACRA’s comparison table of the forms of business structure our post on how to choose the right business structure.

Reserve your business name

When registering their business entity, business owners have to ensure that the proposed name is not:

  • undesirable;
  • identical to the name of any business entity or charity;
  • identical to a name that has been reserved.

Therefore, you should first do a search on BizFile to ensure that the name is not already taken, taking into consideration the guidelines for searching for identical or similar names and checking for names with similar pronunciations available in Practice Direction No. 4 of 2003.

Register your business

Before beginning the registration process online, make sure you have the following documents at hand:

  • Your company name;
  • A brief description of your business and the scope of its activities;
  • Paid up capital amount;
  • Shareholder particulars;
  • Details of your directors;
  • Registered office address in Singapore;
  • Company secretary particulars.

Read more: Documents required when incorporating your business

If you have decided that you will register your business as a company, you can do so by lodging the relevant forms on BizFile. There is a registration fee that depends on the type of business entity you wish to register.

You will typically receive approval from ACRA within a few hours after a name is approved. This may take longer in the case that there are foreign directors or shareholders, and there may be requests for additional documentation before approval is granted.

Once incorporation of your business has been approved, you will be issued the following documents:

  • Certificate of Incorporation: You will receive this via email and it will contain your company registration number, known as the Unique Entity Number (UEN).
  • Company Business Profile: This is a document containing your company’s particulars. You can request for a PDF copy of this for an application fee.

Armed with these two documents, you are ready to go about conducting business in Singapore.

Want more comprehensive information about how to go about registering your company in Singapore? Learn more with our eBook Incorporating in Singapore:

Download your free eBook

 

After incorporation

Once your company is incorporated, it is time to get your business up and running. Whenever transacting on behalf of your business on the government’s e-services portals, you can do so using either you SingPass or CorpPass, a newly launched corporate digital identity that allows for online services to be accessed conveniently and securely.

Open a corporate bank account

In order to set up a bank account with a bank in Singapore, the banks would typically require you to supply a list of documents that they set out in their application forms. Most of the major banks require the physical presence of the executive director and authorised signatory as part of the procedure. However, this is not an absolute rule and some exceptions may be made on a case by case basis – for instance, if you are able to sign the paperwork at one of the bank’s overseas branches or in the presence of a notary public. This is subject to the bank’s discretion and you should enquire directly with the bank.

Set up an employer’s CPF account

As an employer, you may be required to make the Central Provident Fund (CPF) contributions for the employees that you hire. In order to transact with the CPF board (e.g. make CPF payments), you would first need to apply to e-submit your CPF contribution details on CPF e-Submit@web. Upon approval, you will receive an email containing your CPF Submission Number (CSN). To learn more about your CPF obligations, check out the Employer Guides by the CPF Board.

Ensure compliance with local laws

As a business operating in Singapore, ensure that you abide by the various laws that apply to your category of business entity. This may include the following:

  • Filing annual returns. Under the Singapore Companies Act, all locally-incorporated companies are required to hold their Annual General Meeting (AGM) and file their Annual Returns online via BizFile. You may also be required to file your accounts in your Annual Return.This can be done either by an appointed officer of the company (e.g. director or company secretary) or by a registered filing agent engaged by the company.
  • Goods and Services Tax (GST). You may be liable to charge this tax to your clients on goods and services provided and remit this amount to the tax authorities if your company’s annual turnover exceeds S$1 million. Use the GST Registration Calculator by the Inland Revenue Authority of Singapore (IRAS) to determine whether your company needs to register for GST.

 

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How to set up a business in Singapore

Written by

Entrepreneur

 

Singapore is the place to launch a startup. Over the past decade, the number of active young companies rose from 23,000 in 2004 to 55,000 in 2014. Are you an aspiring entrepreneur who is wondering how to set up your business in Singapore? follow this article to know more about How to set up a business in Singapore.

Registering your business in Singapore

1. Now that you have your idea that deserves a Nobel Prize, give it a name. While there are no hard and fast rules that define good business names, it’ll sure help to avoid some of these mistakes highlighted on Entrepreneur.com.

2. Determine the type of business entity e.g. sole proprietorship, partnership, limited partnership, limited liability partnership, private limited, etc. that best suits your needs. They differ in terms of the number of partners, personal exposure to financial liabilities of the business, tax obligations, ongoing administrative costs for record-keeping purposes, etc.

Learn more about incorporating your business in Singapore. Download this free eBook:

3. Obtain a physical location as your registered address. This can be done through selected Company Secretarial service providers and/or co-working spaces. You can even apply for a home office license on LicenceOne if you prefer to grow your business in pyjamas from your HDB! It costs S$20 for a 5-year license (subject to HDB/URA regulation).

4. Registering the business on BizFile is the major milestone that marks the official start of your business. At a small fee (depending on the type of company you set up), you can register your business for the period of one year. Check out ACRA’s FAQs for further details. ACRC is an Organization in Singapore for Incorporating your company Name in Singapore. You’ll need a SingPass for this, so if you don’t have it yet.

5. Setting up a corporate bank account involves careful consideration of the following cost factors to determine the bank and type of account that best fits your business needs:

  • Initial deposit,
  • Monthly account fees,
  • Set-up fee/BizFile search fee,
  • Security token fee,
  • Bank counter usage limitations and penalty,
  • Monthly minimum balance requirements and penalty, and
  • Cheque book charges.

6. Setup an employer’s CPF account and attend the free CPF Employer’s Classroom session to understand your CPF and Medisave contribution obligations.

Start operating as a Company

1. Setup a website on WordPress, Shopify (for eCommerce), etc.

 

Download Online Business eBook

 

2. Choose an ePayment solution such as Stripe, Braintree, etc.

3. Rent a co-working space where you’ll find great minds to share a beer after a hard day’s work.

Related reading: Looking for office space in Hong Kong? Here are some tips

4. If your office space is cramped, Utilise external storage providers. Documents, marketing materials, product stock take a lot of office space and reduce your working area. Just choose a storage solution with the latest technology through an app. This takes the hassle away by providing pickup and delivery services as well as paying for storage on a per item basis. Have access to all your items with one click in the app. It’s the most convenient storage solution in Singapore.

Storage solutions like BEAM offer such services (use the promo code DRAGON for a month’s free storage!).

 

Apply for Mentorship & Funding to Support the Business Operations

1. SPRING Singapore grants include an ACE startups grant where SPRING will match S$7 to every S$3 raised by the entrepreneur for up to S$50,000. The grant will be disbursed over 2 to 3 tranches when pre-determined milestones are reached. So get your business plan ready!

2. National Research Foundation – Early Stage Venture Fund supports Singapore-based technology startups.

3. Venture capital firms provide invaluable mentorship made possible through their deep-set industry knowledge and extensive network. Additionally, they provide funds in exchange for equity.

 

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This a guest contribution submitted by BEAM Blogger, Isabelle Onn. The views expressed here are of the author’s, and Zegal may not necessarily subscribe to them. You, too, are invited to share your point of view! Learn more about guest blogging for Zegal here.

More about BEAM

BEAM is a revolutionary self-storage service provider based in Singapore that empowers consumers and businesses to effectively manage their storage needs via an App.

BEAM makes self-storage convenient, cost-effective and fuss free and helps people enjoy their living and working spaces. We combine superior customer service with innovative technology to provide the best customer experience in the storage industry.

 

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