All Singapore companies are required to file certain reports to relevant government bodies each year, and failure to do so can result in fines, penalties or, in serious cases, prosecution. Thus, it is crucial for all companies to know and understand the requirements and prepare them efficiently annually. The following article will provide the necessary information needed to comply with the Companies Act.
Holding of Annual General Meeting
An Annual General Meeting is a mandatory annual meeting for the company to present its financial statements to before the shareholders so that they can raise any queries regarding the financial position of the company. An AGM is therefore an important opportunity to address their concerns. All companies in Singapore are required to hold AGMs.
The company secretary – or an appointed secretarial service – is required to prepare any necessary documentation for the AGM (e.g. the company Constitution).
AGM Timeline
| For Companies with FYE ending before 31 August 2018 | • First AGM must be held within 18 months from the date of incorporation • Subsequent AGMs yearly at intervals of not more than 15 months • Financial statements tabled at AGM must be made up to 6 months before the AGM date |
| For Companies with FYE on or after 31 August 2018 | • AGM to be held 6 months after the FYE |
Private companies need not hold an AGM if:
- All members have approved a resolution to dispense with the holdings of AGMs;
- The company sends their financial statements to members within 5 months after the FYE; or
- It is a private dormant relevant company* that is exempt from preparing financial statements
*A private dormant relevant company is a private company which is dormant, not listed (or not a subsidiary of a listed company); and has total assets less than or equal to $500,000 (consolidated value if it is an ultimate parent).
Extension of Time to hold your AGM
You can apply for an Extension of Time (EOT) of up to 60 days, if you need to delay holding the AGM or filing the annual return. The application for EOT must be made before your AGM/annual return deadline. ACRA may require up to 14 working days to process the EOT application and the application costs $200.
Penalties for not holding an AGM
Directors who fail to follow the AGM requirements can be prosecuted in court. Eventual consequences can include disqualification or debarment from being a director. In addition, ACRA can impose composition fines on companies that do not hold the required AGMs.
Separately, a late lodgement fee will be imposed for each annual return that is lodged late.
Annual Return
The annual return is an electronic form lodged with ACRA and contains up-to-date particulars of the company such as:
- Company Name
- Principal activities
- Registered office address
- Particulars of the company officers
- Shareholder details, share capital, etc.
- Details of registered charges
- Date to which the financial statements of the company are made up to
The annual return provides critical information that helps the company’s stakeholders to make informed decisions.
The appointed officer of your company (e.g. a director or company secretary) can file the annual return on ACRA’s online filing portal BizFile+. Alternatively, you can engage the services of a registered filing agent to do this on behalf of the company.
Click here to see who needs to file financial statements.
Extension of Time to hold your AGM
You can apply for an Extension of Time (EOT) of up to 60 days to file the annual return. An EOT to file annual return is applicable only to companies with financial year ending on or after 31 August 2018. ACRA may require up to 14 working days to process the EOT application and the application costs $200.
The deadline for filing Annual Return is 30 days from the date of the AGM. In certain cases, a company can file its Annual Return without holding an AGM. A late lodgement fee of S$300 will be charged for annual returns filed after the deadline. Directors who fail to follow the AGM requirements can be prosecuted in court.
Updating Information of Companies and Company Officers
You must update ACRA in a timely manner if there are changes to your company’s information. The following changes are to be notified with ACRA
- Change in company’s name, business activity, registered office address or company officers
- Change in particulars of company officers
- Change in particulars of shareholders
- Change in foreign company’s name and information
- Change in particulars of authorised representative or director of a foreign company
- Change in the Charter, Statue, Memorandum/Articles or other instruments of Foreign Company
- Change in particulars of shareholders
- Change in foreign company’s name and information
- Change in particulars of authorised representative or director of a foreign company
- Change in the Charter, Statue, Memorandum/Articles or other instruments of Foreign Company
Registering a Charge for Companies
A charge is a form of security interest usually taken by a lender or creditor (“Chargee”) to secure repayment of a loan. Once a charge is created, it must be registered with ACRA within 30 days of its creation if the charge is created in Singapore, and within 37 days if the charge is created outside Singapore.
Failure to register the charge is an offence. If convicted, company officers may be fined p to S$1,000. Non-compliance may also render the charge void against the liquidator or other secured creditors of the company.
When a debt for which the charge was given has been paid in whole or in part, the company needs to file with ACRA, a statement of satisfaction of the debt in order to release the charge. Upon successful filing, the charge will be removed from the register.
Register of Registrable Controllers
With effect from 31 March 2017, companies, foreign companies and LLPs (unless exempted) will be required to maintain beneficial ownership information in the form of a register of registrable controllers, and to make the information available to public agencies upon request.
The aim is to make the ownership and control of corporate entities more transparent and reduce opportunities for the misuse of corporate entities for illicit purposes. This will bring Singapore in line with international standards, and boost Singapore’s on-going efforts to maintain our strong reputation as a trusted and clean financial hub.
Click here to find out more on who can be a “Controller” of a Company/LLP and information to be maintained in the Register of Registrable Controllers
Corporate Income Tax returns
The Inland Revenue Authority of Singapore (IRAS) is the main tax administrator to the Government. All companies need to submit two corporate income tax returns to IRAS every year and it is compulsory for every company to adopt E-filling from YA 2020 onwards.
- Estimated Chargeable Income (ECI)
ECI is an estimate of the company’s taxable income (after deducting tax-allowable expenses) for a Year of Assessment (YA). Companies will have to report their ECI within 3 months of their FYE. Companies are exempted to file ECI for the particular YA if its annual revenue is not more than $5 million for the financial year, and ECI is NIL for the YA.
- Form C-S /C
All companies carrying on a trade or business in Singapore need to report their income to IRAS annually by filing their Corporate Income Tax Return. Companies are required to file the Form C-S/ C even if they are making losses.
From YA 2017, companies are qualified to file Form C-S if they meet all of the following conditions:
- The company must be incorporated in Singapore;
- The company must have an annual revenue of $5 million or below
- The company only derives income taxable at the prevailing corporate tax rate of 17%; and
- The company is not claiming any of the following in the YA:
- Carry-back of Current Year Capital Allowances/ Losses
- Group Relief
- Investment Allowance
- Foreign Tax Credit and Tax Deducted at Source
If your company does not qualify to file Form C-S you must file Form C, where you are required to submit your company’s financial statements, tax computation and supporting schedules.
A dormant company must file its Income Tax Return using the Form C-S/ C for Dormant Company unless the company has been granted waiver of Income Tax Return Submission. The condition for the applying for a waiver to submit tax return are:
- It must be dormant and has submitted its Form C-S/ C, financial statements and tax computations up to the date of cessation of business;
- It must not own any investments (e.g. shares, real properties, fixed deposits). If the company owns investments, it must not derive any income from these investments;
- It must have been de-registered for Goods and Services Tax (GST) purposes prior to this application if it had previously been a GST-registered company; and
- It must not have the intention to recommence business within the next 2 years.
Goods and Services Tax (GST)
GST is a consumption tax that is imposed on import of goods (collected by Singapore Customs) at the standard tax rate of 7%. There are two modes of GST registration which are compulsory registration and voluntary registration.
If the business has a turnover of more than S$1 million in the past 12 months or if the business is currently making or is expected to do so in the next 12 months, it is required for the company to register for GST. However, businesses with a smaller turnover are not required to do so but they can register for it voluntarily.
For more information regarding GST, please click here.