Want to avoid unnecessary fines? Here is a guide which highlights the annual regulatory requirements for Singapore private limited companies.
Whether you are an individual or a corporate entity, knowing when you have to meet regulatory deadlines is essential, especially when you want to avoid paying penalties or worse still, dealing with a court summons.
Being compliant, although may seem like a hassle for some, has many advantages and is a good practice for companies. It gives assurance that the company is properly run, allows potential investors to access relevant and accurate public information that has been filed with the Accounting and Corporate Authority (ACRA), and it helps avoid unnecessary penalties and fines.
This guide highlights the annual regulatory requirements for Singapore private limited companies and it applies to active and dormant companies.
Preparing Financial Statements
In Singapore, all companies must prepare annual financial statements in accordance with the Singapore Financial Reporting Standards (SFRS). Proper accounting records have to be kept for at least 5 years and the financial statements should consist of the Statement of Comprehensive Income (SOCI, or Profit and Loss Statement), Statement of Financial Position (SOFP, or Balance Sheet), Cash Flow Statement, Statement of Changes in Equity and accompanying notes. The urgency to complete the financial statements in a timely fashion is largely dictated by the compliance deadlines as stated in the following sections.
Filing of Estimated Chargeable Income (ECI)
All companies, including new companies, are required to file ECI with the Inland Revenue Authority of Singapore (IRAS) within 3 months from the end of their financial year except for companies that qualify for the administrative concession.
Administrative concession:
Companies do not need to file ECI for the relevant YA if its annual revenue is not more than S$1 million; and
ECI is NIL for the YA.
Audit of Financial Statements
Once the financial statements are ready, companies are required to have their accounts audited and sent to shareholders in preparation for the Annual General Meeting (AGM) within 4 months from the end of their financial year (for public-listed companies) or within 6 months from the end of their financial year (for private limited companies).
Companies which fulfil the following conditions need not have their accounts audited:
Private company in the relevant financial year (Ie, no corporate shareholder); and
Meet 2 out of 3 of the following conditions for the past 2 consecutive financial years
Total revenue does not exceed S$10 million;
Total assets does not exceed S$10 million;
Number of employees does not exceed 50 persons.
Holding of Annual General Meeting (AGM)
All companies must hold an AGM once every calendar year. The following compliance points apply:
The first AGM must be held within 18 months from date of incorporation.
Subsequently, held once every calendar year where the interval between AGMs must not be more than 15 months.
Financial statements presented at the AGM must not be dated more than 6 months before the AGM.
Filing of Annual Return
All companies are required to file annual return with ACRA within 1 month from the date of the AGM.
Filing of Income Tax Return
All companies are required to file income tax return with IRAS by 30 November in the year following the financial year end. This deadline is extended to 15 December in the year following the financial year end, if the company is e-filing its income tax returns.
It is important for companies to ensure they meet the compliance deadlines. The directors of the company are responsible and accountable for complying with these deadlines and they may be held liable for fines or will be prosecuted, in addition to the fines imposed on the company.
Companies should consider engaging a professional to assist in managing their compliance matters, so that they can focus on THEIR WILDLY IMPORTANT GOALS ™ Chris McChesney