Compliance with ACRA Requirements – A Singapore Business Guide

Compliance with ACRA Requirements – A Singapore Business Guide

Do you want to know more about the compliance requirements you need to maintain for your Singapore Company?  

According to the Singapore Companies Act, all companies in Singapore must comply with the annual filing requirements of ACRA (the Accounting and Corporate Regulatory Authority). ACRA is Singapore’s regulator of business entities, public accountants and corporate service providers. It is the Registrar of Companies (ROC). It also runs Bizfile, the online filing system.

Whether you are a business owner of an active or dormant company in Singapore, annual filings are mandatory for you. Failing to regularly meet ACRA ongoing compliance requirements in a timely manner can have consequences. Below is a detailed guide to filing requirements for the fulfilment of annual compliance with ACRA:

Annual General Meetings (AGM)

An AGM allows your shareholders, directors, and officers to review the financial statements of the company and discuss other company issues together. The following matters are also discussed in an AGM:

  • To approve the Director’s Report/Audit Report;
  • To approve Directors’ fees, remuneration and emolument;
  • To re-elect the Director(s) (if necessary);
  • To reappoint auditors;
  • To declare dividends (if any);
  • To transact any other business, etc.

If your company’s financial year ends before 31 August 2018:

  • You must hold the first AGM within 18 months of the date of incorporation.
  • The financial statements must be up to a date not exceeding 4 months before the AGM if you are a listed company. For non-listed companies, it must be made up to a date not exceeding 6 months before the AGM.

If your company’s financial year ends on or after 31 August 2018:

  • You must hold an AGM within 4 months after your company’s FYE and file the annual return within 5 months after your company’s FYE if you are a listed company.
  • You must hold an AGM within 6 months after your company’s FYE and file the annual return within 7 months after your company’s FYE if you are not a listed company.

Note: A company can decide not to have annual AGMs by passing a unanimous resolution.

Filing of Annual Returns

As envisaged under the Companies Act, all locally incorporated companies must file their annual returns. Once an AGM is held, you must file your company’s annual returns with the ACRA within one month from the date of the AGM. The annual returns will be submitted along with the following information for verification:

  • Company’s full name and registration number;
  • Registered address;
  • Principal activities;
  • Company type;
  • Summary of issued and paid-up share capital;
  • Registered charges;
  • Information on directors, company secretary, auditors and shareholders;
  • Date of AGM and the financial period of the audited accounts; and
  • Financial statements, if applicable

Preparing Financial Statements

A company’s financial statements are prepared after its fiscal year end. The financial statements must be filed in eXtensible business reporting language (XBRL) format during the filing of annual returns if your company either has a corporate shareholder for the financial year or its insolvent (has more total liabilities than total assets).

The directors of your company need to provide these financial statements as part of the AGM.  According to the Financial Reporting Standards of Singapore, the accounts presented at the AGM must include:

  • A Statement of Comprehensive Income;
  • A Statement of Financial Position;
  • A Cash Flow Statement; and
  • A Statement of Changes in Equity.

Filing Audited Accounts/Directors Reports

The Companies’ Act stipulates that you must file audited reports if your company has:

  • A corporate shareholder
  • Sales turnover exceeding SGD$5 million
  • Has more than 20 shareholders

While audit is a requirement by ACRA, your company does not have to engage auditors to perform a full statutory audit if there is insufficient activity during a specific financial year. These companies are known as small or dormant exempt private companies (“EPCs”) and they are not required to prepare an audited report if:

  • Their annual turnover of less than SGD$5 million;
  • None of their shareholders are corporate entities;
  • They have 20 or fewer individual shareholders.

If you company meets the above requirements, you can prepare an unaudited report commonly known as the directors’ report.

Note: A company is considered dormant if no accounting transaction occurs during a certain financial year. Dormant companies can be exempted from preparing audit reports, but will still be required to prepare unaudited reports.

Consequences in Case of Noncompliance with ACRA

Failure to comply with the above requirements will incur heavy penalties and/or court prosecution. Quite simply, if a company defaults in its compliance duties with ACRA, its directors are held responsible, and the penalties are relatively steep.

ACRA can penalise your company for non-compliance for any of the following reasons:

  • If your AGMs are not held in a timely manner
  • If the financial statements presented at the AGM are not up-to-date.
  • If your company does not submit Annual Returns and financial statements on time.

Companies face a fine of between SGD$50 and SGD$300 for each non-compliance.

Undoubtedly, it would be sensible if you hire a professional corporate service provider, such as Tianlong Services to help you stay compliant with ACRA’s requirements. Our team of proficient specialists, certified accountants and lawyers have the knack to combine their expertise towards all compliance matters on a regular basis.

Contact us to speak with us today!

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