For startups, corporate governance is often cheaper than regrets later

Many startups tend to focus on technology and commercialisation but fail to give corporate governance the attention it needs

Claudia Chong

Published Tue, Sep 21, 2021 · 05:50 AM

Startups

Singapore

EARLY-STAGE startups with lapses in corporate governance risk paying a hefty price later on. Take, for instance, failure to get the requisite approval for issuing shares.

When investors in a fresh round of funding spot this gap, "there's a mad scramble to clean things up", said Bernie Neo, director at Infinitus Law Corporation. The only way to rectify this is to go to court, and the proceedings could last six to eight weeks, or even three months.

"And these startups are very time-sensitive (in their need for funding) - this could mean the difference between life or death," Mr Neo said.

He was …