Statutory Compliance for Singapore Private Limited Companies
The Companies Act, Cap 50 stipulates that Singapore incorporated companies are required to comply with the following important statutory requirements:
- Preparation of the annual financial statements
- Holding of the Annual General meeting (AGM)
- Filing the Annual Return
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Financial Statements
The Companies Act requires directors to present and lay before the company, at its Annual General Meeting, financial statements that:
- comply with Accounting Standards issued by the Accounting Standards Council; and
- provide a true and fair view of the profit and loss, and the state of affairs of the company.
The Financial Statements must include:
- Report of Directors and Statement by Directors
- Independent Auditors’ Report (if required)
- Balance Sheet
- Profit and Loss Statement
- Statement of Changes in Equity
- Cash flow Statement
- Corresponding Notes to Financial Statements
Private and Public companies are required to file with ACRA a full set of XBRL financial statements.
The following types of companies are exempted from filing their full set of financial statements in XBRL but must file their AGM financial statements in PDF together with Financial Statements Highlights in XBRL format instead:
- Companies which are (1) Commercial Banks; (2) Merchant Banks; (3) Registered Insurers; and (4) Finance Companies, that are regulated by the Monetary Authority of Singapore; and
- Companies allowed by law to prepare accounts in accordance with accounting standards other than SFRS, SFRS for Small Entities or IFRS (International Financial Reporting Standards).
What about Exempt Private Companies (EPCs)?
An Exempt Private Company (EPC) has 20 or fewer shareholders and its shares are not held by any corporation as defined under Section 4(1) of the Companies Act. The Minister can also gazette a company as an EPC.
Which companies are exempted from having their accounts audited?
A company qualifies for the exemption if it is:
- An Exempt Private Company (EPC) with revenue not more than S$5 million for the financial year starting on or after 1 June 2004.
- An EPC with revenue not more than S$2.5 million for the financial year starting on or after 15 May 2003 but before 1 June 2004.
- Any company, including an EPC, which is dormant for the financial year starting on or after 15 May 2003.
If a company meets the criteria for audit exemption, it does not need to:
- Have its profit and loss accounts, or consolidated accounts and balance sheet, audited by an approved company auditor.
- Provide members of the company with copies of the auditor’s report. However, the law under Section 203 of the Companies Act relating to the right of members to be furnished with the accounts continues to apply.
- Present copies of the auditor’s report at the Annual General Meeting.
Insolvent EPCs have the following options to file their financial statements with ACRA:
1. A full set of financial statements in XBRL format; or
2. A full set of financial statements in PDF with Financial Statements Highlights in XBRL format.
Solvent EPCs are exempted from filing their financial statements with ACRA. If they choose to voluntarily file their financial statements with ACRA, they have the following options:
1. A full set of financial statements in XBRL format / PDF format; or
2. Financial Statements Highlights in XBRL format.
Annual General Meeting
Newly incorporated companies are required to hold their first AGM within 18 months from the date of incorporation. Thereafter, the AGM should be held
- once in every calendar year; and
- within 15 months from the date of the last AGM, whichever is the earliest
The directors shall present a true and fair view of the company’s accounts to their shareholders and the financial statements are to be tabled for the shareholders’ approval.
For a public company:
Accounts presented at the AGM shall be made up to a date not more than 4 months before the AGM.
In the case of any other company:
Accounts presented at the AGM shall be made up to a date not more than 6 months before the AGM
The following matters are to be addressed at the AGM:
- Approval of the Director’s Report and Financial Statements
- Approval of Directors’ fees, remuneration and emolument;
- Re-election of Director(s) (if applicable)
- Re-appointment of auditors (if applicable)
- Declaration of dividends, if any
- To transact any other business as required
Annual Return
The Annual Return must be filed with the Registrar within one month after the AGM.
| Filing Requirements | Definition | Solvent – able to meet its debts when they fall due |
Insolvent – not able to meet its debts when they fall due |
| Small EPC | EPC with annual revenue less than S$5 million |
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| Normal EPC | EPC with annual revenue more than S$5 million |
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| Dormant EPC | EPC that do not have any accounting transactions (no business activities) for the financial year concerned or have not commenced business since incorporation. |
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| Private Company (Non EPC) |
A company limited by shares with at most 50 shareholders | Active
Dormant
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| Public Company |
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Active
Dormant
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What if a company fails to hold its AGM or file Annual Return?
A penalty will be imposed for late lodgment as prescribed in the Companies Act.
Additionally, a summons may be issued against a company director for not holding the company’s Annual General Meeting and filing its Annual Return as required under the law.
| Length of Default (Days) | Late Lodgment Fee |
| Not more than 30 days | $60 |
| Between 31 days to 60 days (Both days inclusive) | $120 |
| Between 61 days to 90 days (Both days inclusive) | $170 |
| Between 91 days to 180 days (Both days inclusive) | $220 |
| Between 181 days to 365 days (Both days inclusive) | $250 |
| Between 366 days to 730 days (Both days inclusive) | $350 |
| Between 731 days to 1095 days (Both days inclusive) | $350 |
| More than 1096 days | $350 |
Note: Obligations of a Director under S175, S197 and S201 Singapore Companies Act
Local companies to prepare accounts for Annual General Meeting (AGM) and file their Annual Returns under S175, S197 and S201 of the Companies Act
- Section 175 -to hold its AGM within 18 months of its incorporation. Thereafter, once every calendar year but not later than 15 months from the date of the last meeting.
- Section 201 -the accounts must not be made up to a date more than 6 months from the date of the AGM.
- Section 197 -to file the Annual Return within 1 month after holding the AGM.
Failure to comply – Late filing penalties and/or composition fines
- Fine of $5,000 & default penalty-s 175 & 197
- Fine of $10,000 or up to 2 years imprisonment for s 201
Compliance Ratings and Certificate
The Colour-Coded Compliance Rating and Certificate of Compliance are part of the initiatives aimed to recognise companies with good records for holding their AGMs on time, tabling and filing up-to-date financial statements and Annual Return for the year in question.
Companies which are fully compliant in their filings will receive a positive compliance rating ( ) which makes them eligible for a Certificate of Compliance; while those which fail to comply with the compliance requirements are given a negative rating ( X ).