FAQ

Corporate secretary

Under Section 171 of the Singapore Company’s Act (Cap. 50), every Singapore incorporated company shall have one or more secretaries each of whom shall be a natural person who has his principal or only place of residence in Singapore.

Upon your submission of the proposed name, KSN will process the name reservation with the Accounting And Corporate Regulatory Authority (ACRA), which automatically processes the application and responses with an outcome immediately.

Under Section 175 – Annual General Meeting (AGM) of the Companies Act, 

for newly incorporate company, the company is first Annual General Meeting (AGM) within 18 months after its incorporation.

for existing company, AGMs must be held

  • every calendar years and
  • the interval between AGMs should not be more than 15 months.

Under the Companies Act, a company must have at least one director who is ordinarily resident in Singapore. 

Being “ordinarily resident in Singapore” means the director’s usual place of residence is in Singapore. 

The company secretary must

  • a be residing locally in Singapore and
  • he/she must not be the sole director of the company.

The secretary of a public company must comply with section 171(1AA) of the Companies Act i.e. must possess at least one of the following qualifications:

  • Been a secretary of a company for at least 3 of the 5 years immediately before his appointment as secretary of the public company.
  • Qualified person under the Legal Profession Act (Cap. 161).
  • Public accountant registered under the Accountants Act (Cap. 2).
  • Member of the Institute of Certified Public Accountants of Singapore.
  • Member of the Singapore Association of the Institute of Chartered Secretaries and Administrators.
  • Member of the Association of International Accountants (Singapore Branch).
  • Member of the Institute of Company Accountants, Singapore.

A company is considered dormant during a period in which no accounting transaction occurs.

Transactions that will not affect the dormant status of the company:

  • The appointment of a secretary of a company;
  • The appointment of an auditor;
  • The maintenance of a registered office;
  • The keeping of registers and books;
  • The payment of fees to the Registrar or an amount of any fine or default penalty paid to the Registrar (ACRA)
  • The taking of shares in the company by a subscriber to the memorandum in pursuance of an undertaking of his in the memorandum.

The following are the three most common statutory obligations that are often breached by companies and/or their directors for which ACRA will take enforcement action: 

  • Section 175(1) of the Companies Act, Cap 50 requires the company and its directors to hold an Annual General Meeting (AGM) every calendar year and not more than 15 months after the holding of the last AGM (Exception: The very first AGM for a company can be held within 18 months of its incorporation instead of 15 months).
  • Section 201(1) of the Companies Act, Cap 50 requires the directors of the company to lay at the AGM, accounts that are made up to a date that is not more than 6 months (if the company is not a listed company) and not more than 4 months (if the company is a listed company) before the date of the AGM for non-listed companies and listed companies respectively. 
  • Section 197(1)(b) of the Companies Act, Cap 50 requires the company and its directors to lodge an Annual Return (AR) within 30 days after its AGM.

Companies and every director that breach these statutory obligations may be offered an opportunity to pay a composition sum of $300 per breach instead of facing prosecution. Separately, a late lodgement fee will be imposed at time of lodgement, for each AR that is lodged late.

ACRA may waive the composition fine if the directors  register and attend the Directors Compliance Programme (“DCP”) when ACRA write to them to offer them a chance to attend the DCP (only first time offenders are eligible).

If a director seeks to compound his breach(es) after a summons has been issued, ACRA may consider allowing him to compound by offering  a composition sum of $600 per breach or ACRA may refuse to allow him to compound. 

If the director seeks to compound after he has failed to turn up in court to answer to his summons and the Court has issued a warrant for his arrest, ACRA may consider allowing him to compound by paying a composition sum of $900 per breach or refuse to allow him to compound.

Audit

A company is exempted from having its accounts audited if it is an “small company”.

A company qualifies as a small company if:

(a) it is a private company in the financial year in question; and

(b) it meets at least 2 of 3 following criteria for immediate past two consecutive financial years:  

     (i) total annual revenue ≤ $10m;

     (ii) total assets ≤ $10m;

     (iii) no. of employees ≤ 50.  

For a company which is part of a group:

(a) the company must qualify as a small company; and

(b) entire group must be a “small group”

to qualify to the audit exemption.

For a group to be a small group, it must meet at least 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.

Where a company has qualified as a small company, it continues to be a small company for subsequent financial years until it is disqualified. A small company is disqualified if:

(a) it ceases to be a private company at any time during a financial year; or

(b) it does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years.

Where a group has qualified as a small group, it continues to be a small group for subsequent financial years until it does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years.

Accounting / Book keeping

Our accountants are trained to use a variety of accounting software, e.g. :

  • Sage UBS
  • Xero
  • MYOB

If you wish your accounts to be prepared using your compay’s accounting software, contact us so we can assess whether are we familiar with it.

For accounts to be prepared using MYOB, there will be extra charges if you wish us to purchase the license for your company.

For accounts to be prepared using XERO, there will be monthly subscriptions charges if you currently don’t have an Xero account.

Cloud accounting

We will help you customize the sales invoice template on Xero and set up the chart of accounts.

You can then use Xero to issue your sales tax invoices.

For your expenses, supplies tax invoices, you just need to send them to us along with the monthly bank statements.

If you send the documents to us via email or app, it will be updated within 3 working days.

You can

  1. Email a scan copy to a dedicated email for you
  2. Take a photo with an app

We will minimally store the scanned documents for the statutory requirement of 5 years.

Tax

The corporate tax rate is 17%. (caa 19 Feb 2018)

Partial tax exemption for companies (from YA 2020)

Chargeable income

% exempted from Tax

Amount exempted from Tax

First $10,000@75%=$7,500
Next $190,000@50%=$95,000
Total $200,000 =$102,500

Tax exemption scheme for new start-up companies (where any of the first 3 YAs falls in or after YA 2020)

Chargeable income

% exempted from Tax

Amount exempted from Tax

First $100,000@75%=$75,000
Next $100,000@50%=$50,000
Total $200,000 =$125,000

Partial tax exemption for companies (YA 2010 to YA 2019)

Chargeable income

% exempted from Tax

Amount exempted from Tax

First $10,000@75%=$7,500
Next $290,000@50%=$145,000
Total $300,000 =$152,500

Tax exemption scheme for new start-up companies (where any of the first 3 YAs falls in YA 2010 to YA 2019)

Chargeable income

% exempted from Tax

Amount exempted from Tax

First $100,000@100%=$100,000
Next $200,000@50%=$100,000
Total $300,000 =$200,000

It is a myth that IRAS will not check companies’s tax submission for expenses below a certain threshold.

IRAS may perform audit checks on companies on  random basis.

IRAS also perform investigation audit checks in the events of whistle blowers.

In cases where the error/omission/discrepancy in the tax return was made without any intention to evade taxes , the taxpayer may, under the Income Tax Act:

a. face a penalty up to 200% of the amount of tax undercharged;

b. be fined up to $5,000; and/or

c. be imprisoned up to three years.

In cases where the error/omission/discrepancy in the tax return was made with intention to evade taxes, the taxpayer may, under the Income Tax Act:

a. face a penalty up to 400% of the amount of tax undercharged;

b. be fined up to $50,000; and/or

c. be imprisoned up to five years.