YEARLY COMPLIANCE REQUIREMENTS FOR SINGAPORE COMPANIES
March 4, 2020
YEARLY COMPLIANCE REQUIREMENTS FOR SINGAPORE COMPANIES
It is mandatory for every Singapore Company to file its Annual Return with Accounting and Corporate Regulatory Authority(ACRA) and Annual Tax Return with the Inland Revenue Authority of Singapore (IRAS) according to Singapore law. As this is a government requirement, companies that fail to comply or not filling before the due date imposes penalties depending on the offense. To provide you with a better understanding of this statutory requirement, the following are steps towards company compliance, as well as explanations and points of each step below.
01.
Engage of Corporate Secretary
- Under Section 171 of the Companies Act requires all companies in Singapore to appoint a company secretary who ensures that the company is compliant with Singapore’s Company Law.
- ACRA requires every company to appoint a company secretary within 6 months of its incorporation. The company corporate secretary will be the main officer in charge of all administrative and reporting responsibilities a company is required to comply to by law. These requirements include filing of annual returns, recording and filing of board resolutions, etc.
- Typically, companies engage the services from a corporate secretarial firm in Singapore to provide them with corporate secretarial services. A corporate secretarial firm will provide the hiring company with a named company secretary.
- Corporate Secretarial Firms such as our firm, will be able to help and guide you through with this.
01(a).
Register of Controllers
- Register of controllers is a law started on 31st March 2017 that requires companies, foreign companies and LLPs (unless exempted) 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 aims 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.
- Controllers are individual or legal entity that has a significant interest in or significant control over the company. Which means individual with 25% of shares or more are required to be registered.
- Corporate Secretarial Firms such as our firm, will be able to help and guide you through with this.
02.
Preparation of Management Accounts and Bookkeeping
- Bookkeeping is to prepare the company’s management accounts, which also means to generate the Profit & Loss, Balance Sheet, General Ledger, Aging Reports, etc.
- Bookkeeping can be done on a monthly basis, quarterly basis or on a yearly basis. You are required to prepare your management accounts right after the company’s financial year end has ended as the management accounts will reflect on the financial statements and the tax computation, which we will get on later.
- As an accounting firm like us, Accountancy Hub will be able to provide you with a worry-free bookkeeping service at ease. Based on the management accounts prepared, the company will then need to identify the required type of financial statement.
2(a) & (b).
Preparing annual financial statements Statutory Audit
- A statutory audit is a type of external audit usually conducted annually to meet a specific set of regulations set by the legislation. Such an audit is requir
- Bookkeeping is to prepare the company’s management accounts, which also means to generate the Profit & Loss, Balance Sheet, General Ledger, Aging Reports, etc.
- Bookkeeping can be done on a monthly basis, quarterly basis or on a yearly basis. You are required to prepare your management accounts right after the company’s financial year end has ended as the management accounts will reflect on the financial statements and the tax computation, which we will get to later on.
- As an accounting firm like us, Accountancy Hub will be able to provide you with a worry-free bookkeeping service at ease. Based on the management accounts prepared, the company will then need to identify the required type of financial statement.
- ed by the laws of the stipulated governing Act . In Singapore, ACRA (Accounting and Corporate Regulatory Authority) is the authority that governs the laws and regulations of companies.
- Auditing is also important in demonstrating a better insight of an organization, especially the finances needed to support the decision-making to improve your business. An audited financial statements is required to be accompanied during the AGM, as your annual returns filing. However, an audited financial statements is only required bigger companies whereas small companies are exempted.
- If the company meets at least 2 of 3 following criteria, the company is required to be audited:
- Total annual revenue more than $10m a year or equivalent;
- Total assets more than to $10m a year or equivalent;
- More than 50 employees in a year.
Unaudited Financial Statement/Compilation Reports
Companies that qualifies as small company could enjoy audit exemption under current Singapore Companies Act, Chapter 50 (the “Act”). These companies have a choice as to whether to have their accounts audited except where the law has prescribed that an audit is still required. This will help many companies reduce their business operating cost.
An unaudited financial statement is the transaction record and analysis of the financial activities of your company during the accounting year. It is a report is compiled with Statement of Comprehensive Income (i.e. Profit and Loss Account), Statement of Financial Position (i.e. Balance Sheet), Cash Flow Statement, and Statement of Changes in Equity, without being audited. An unaudited financial statements is required to be accompanied during the AGM, as your annual returns filling.
03.
A Requirement of holding Annual General Meeting (AGM)
It is mandatory for every SINGAPORE company to Holding an Annual General Meeting (AGM) on a yearly basis. It is a compliance requirement issued by the ACRA. A penalty fine may be imposed by ACRA if the company and its directors fail to do so, as they will be held responsible. An AGM is a way for your company to present its financial statements to members of the company.
Corporate Secretarial Firms such as our firm, will be able to help and guide you through with this.
Filing annual return with ACRA
In compliance with Singapore companies act, all Singapore Companies are required to lodge an Annual Return (AR) with ACRA within 1 month of its AGM.
On top of that, it is also important to note that for insolvent companies are also required to file its accounts and also file its financial statements in XBRL format, which our firm will be able to help with as well.
04.
Corporate Tax Computation, ECI & Filing to IRAS
All companies are required to file Estimated Chargeable Income (ECI) within three months from the end of their financial year, except for companies that qualify for the administrative concession and those that are specifically not required to file.
A tax computation is also required to be filed on the following year of assessment(YA) as it is a statement showing the tax adjustments to the accounting profit to arrive at the income that is chargeable to tax.
As our firm also handles tax services, our tax agents will be able to help and guide you through the whole process.
