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Equity Restriction on Registered Engineering Consultancy Practices Removed

20 January 2022

The requirement for at least 70% of the share equity in an engineering consultancy practice registered under section 7A of the Registration of Engineers Act 1967 (‘ECP’) to be held by Professional Engineers with Practicing Certificate (‘Professional Engineers’) has been removed with effect from 1 January 2022 pursuant to the Registration of Engineers (Amendment) Regulations 2021 [P.U.(A) 438/2021].
 
Accordingly, the share equity in an ECP may now be held by any person and/or any body corporate.
 
However, the requirements in relation to the composition of the board of directors of an ECP under regulation 34B of the Registration of Engineers Regulations 1990 [P.U.(A) 128/1990] remain in force, namely that: 

  1. at least 2/3rds of the members of the board of directors must be Professional Engineers; 

  2. one member of the board of directors must be the person named in paragraph 7A(3)(c)(iv) of the Registration of Engineers Act 1967, that is, the person who: 
  • has control and management of the day-to-day affairs of the ECP; 

  • is a Professional Engineer; and 

  • is authorised under a resolution of the ECP’s board of directors to make all final engineering decisions on behalf of the ECP in respect of the requirements under the Registration of Engineers Act 1967 or any other law relating to the supply of professional engineering services by the ECP; and 
  1. the remaining members of the board of directors may be any person. 
Comments
 
This liberalisation of the equity holdings in an ECP is significant and could lead to the advent of ECPs that are owned by corporations and persons who are not Professional Engineers. It may also see the rise in the number of listed entities that provide ECPs.
 
Alert by Hazel Binsilyn Bachi (Associate) of the Corporate Practice of Skrine.

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.

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