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.
Companies must appoint a company secretary within 6 months from the date of incorporation. This position cannot be left vacant for more than 6 months or the directors may face a penalty of up to S$1,000.
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 secretary is responsible for the administration of the company. Secretary is also required to ensure that all the directors and shareholders are informed of their statutory obligations such as the filing of annual returns.
The responsibilities of a secretary can be varied depending of a company’s needs.
Below are some examples:
- Maintain and update the company’s registers and minutes books
- Administer, attend and prepare minutes of meetings of directors and shareholders
- Assist the Chairman of the meeting in the conduct of the meeting
- Ensure compliance with statutory requirements under the Companies Act
- Ensure compliance with the company’s Memorandum and Articles of Association (“M&AA”)
- Keep the company and its directors aware of the deadlines for annual returns and any other returns that should be filed with ACRA
- Advise the company on and attend to the appropriate electronic filings with the ACRA for changes within the company within the prescribed timeframes as set out by the ACRA
- Ensure safe custody and proper use of the company seal, if applicable
- Communicate to the company and its directors any relevant changes in statutory law on a timely basis
- Function as an intermediary between the company and the relevant authority for specific needs of the company such as ACRA, the Stock Exchange and the Inland Revenue Authority of 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.
An annual general meeting (AGM) is a way for your company to present its financial statements (accounts) to shareholders (members). Shareholders can then ask questions about the health of your business. An AGM is therefore an important opportunity to address their concerns.
All companies in Singapore are required to hold AGMs. The date of your company’s AGM is declared to ACRA when filing your company’s Annual Return on BizFile+.
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.
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.
All companies are required to file their annual returns on time. Companies that file annual returns after the due date will be imposed with a late lodgement penalty of up to $600 for each late filing.
ACRA may prosecute the company and/or its directors that breach statutory obligation in court if:
- The company and/or its directors do not accept the offer of composition; or
- when ACRA decides not to offer composition for the breaches.
ACRA may also not offer composition after a summons is issued. ACRA will serve the summons to the company’s registered office address and/or the director’s residential address by registered post. The summons will state the date, time and the Court where the company’s representative or director is required to appear before. In court, the company’s representative or director can decide whether to plead guilty or claim trial to the charges. If the director and/or the company are convicted by the court, they may be fined up to a maximum of $5,000 per charge.
The company’s representative or director must attend court even if a representation has been made to ACRA. If the company fails to send a representative (with a letter of authority) to attend court, the court may proceed to fix the matter for an ex parte hearing to decide whether the company is guilty of the charges. If the director fails to attend court, a warrant for his arrest will be issued by the court.
ACRA can strike off a company if there is reasonable cause to believe that a company is not carrying on business or is not in operation (e.g. failing to file annual return.)
A director with at least three companies struck off by ACRA within a period of five years could be disqualified by ACRA. Once disqualified, an individual will not be allowed to be a company director or take part in the management of any local or foreign company for five years, effective from the date on which the third company is struck off. A disqualified director cannot take on any new appointment as a director or be in any way directly or indirectly concerned or take part in the management of a company.
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
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.
In Singapore, these are the following accounting standards”
- Singapore Financial Reporting Standards (International)
- Financial Reporting Standards
- Singapore Financial Reporting Standard for Small Entities
- Charities Accounting Standards
You can refer to here for the applicable standards
It depends on your management’s requirements. If they need to know the profitability of the business on a timely basis, we will recommend updating the accounts on a monthly basis. For GST registered companies, the accounts need to be updated minimally on a quarterly basis so as to submit GST returns to IRAS timely.
The company must maintain proper records of its financial transactions. These include:
- Source documents that substantiate all business transactions, such as receipts, invoices, vouchers, bank statements, and other relevant documents issued to or received from customers;
- Accounting ledgers, schedules and journals documenting your company’s assets and liabilities, income and expenses, profits and losses; and
- Any other written evidence of transactions connected with your business.
Per Companies Act 1997, para 199(2), the company must retain its accounting records and supporting documents for 5 years from the relevant year.
The records of your company can be kept either manually or electronically, in a manner such that they can be conveniently and properly audited.
If your records are kept manually in a physical form, they should be kept in a legible and well-organised manner. For example, photocopies should be made of receipts printed on thermal paper in case the original receipts fade over time.
If your records are kept electronically, your company should ensure that proper internal controls are put in place to ascertain the integrity, completeness and reliability of the electronic records. This can be done by stating, for example, the manner in which records should be kept, when and how documents should be filed and stored in a database, or how image captures should be saved.
Firstly, the companies will not be able to prepare a financial statement to present at the AGM.
The penalty for failure to comply with the Companies Act 1997 on preparation of financial statements is liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years.
Secondly, the company cannot fill the annual return with ACRA.
Penalty for late filing of annual returns is S$300 for late lodgement filed within 3 months after filing due date; or $600 for late lodgement filed more than 3 months after filing due date.
Lastly, the company will also be unable to file their corporate income tax on time with IRAS.
IRAS will make the steps here for late filing of income tax.
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.
- Email a scan copy to a dedicated email for you
- Take a photo with an app
We will minimally store the scanned documents for the statutory requirement of 5 years.
The corporate tax rate is 17%. (caa 19 Feb 2018)
Partial tax exemption for companies (from YA 2020)
% exempted from Tax
Amount exempted from Tax
Tax exemption scheme for new start-up companies (where any of the first 3 YAs falls in or after YA 2020)
% exempted from Tax
Amount exempted from Tax
Partial tax exemption for companies (YA 2010 to YA 2019)
% exempted from Tax
Amount exempted from Tax
Tax exemption scheme for new start-up companies (where any of the first 3 YAs falls in YA 2010 to YA 2019)
% exempted from Tax
Amount exempted from Tax
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.
GST is only compulsory if the company has:
- Revenue of more than S$1 million in the past 12 months or;
- Expect to make revenue of more than S$1 million in the next 12 months
If these criteria are met, a submission of the GST application to Inland Revenue Authority of Singapore (IRAS) is required within 30 days. Failure to do so will result in penalties.
Companies may choose to voluntarily register if the company makes any of the following:
- Taxable supplies;
- Only out-of-scope supplies (refer to sales of goods which did not enter Singapore and goods in transit)
- Exempt supplies of financial services which are also international services
The individual that is in charge of preparing the GST returns has to complete 2 e-Learning courses, “Registering for GST” and “Overview of GST” and pass the quiz for voluntary registration. The individual does not need to do so if he:
- Has the experience of managing other existing GST-registered businesses; or
- Is an Accredited Tax Advisers (ATA) or Accredited Tax Practitioners (ATP); or
- The business is applying to be registered under the Overseas Vendor Simplified Pay-only Registration Regime.