Everything you should know about Annual Filing Requirements with ACRA
All the Singapore registered company’s needs to be aware with the Annual filling requirements with ACRA. This is because as per the law, if any of the company fails in complying with the requirements they will be penalized. In this article, we have covered all the requirements concerning the annual returns.
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1 Staying Compliant with ACRA
Staying Compliant with ACRA
All the Singapore registered private limited companies must fill the return by complying with the Accounting and Corporate Regulatory Authority (“ACRA”). Whether you run an active or dormant Singapore-based company, filing an Annual return is mandatory.
If you didn’t meet the ongoing compliance requirements on time anytime in the financial year, you might have to face the consequences.
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Annual General Meeting (AGM) / Filing of Annual Returns (AR)
Each Singapore registered company requires organizing the Annual General Meeting (AGM) each year, at which its financial statement is to be tabled and approved by the shareholders.
Companies must hold annual general meetings (“AGM”) in compliance with the Singapore Companies Act (Cap.50):
- At least once in each calendar year
- 15 months following the date of the most recent AGM, whichever is the earliest
- You need to keep in mind that newly registered companies need to organize their first AGM within 18 months following the date of registration.
An AGM can be:
- One can organize the AGM anywhere in the world, where the shareholders meet, or
- It is possible to adopt resolutions in writing without requiring a meeting.
The following things are generally discussed in an Annual general meeting:
- Approval of the Director’s Report and Audit Report
- Approve Directors’ salaries, remuneration, and payments;
- To reappoint auditors
- To declare dividends, if any
- To transact any other business
Requirement for Filing Accounts
The directors of a company must present their annual financial statements and the financial statements compiling them to the shareholders at an AGM. The financial statements must include:
- Report of Directors & 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
Note: According to Section 201 of the Companies Act, it signifies that the financial statement must not be older than six months from the date of the AGM.
Filing Directors Reports/Audited Accounts
A company does not need to prepare the audited report under the following situations:
- There is no sales turnover exceeding $5 million.
- If the company has fewer than 20 shareholders
- For the specific financial year, it did not have a corporate shareholder.
The Singapore registered company that complies with the requirements mentioned above gets liable to prepare an unaudited report, also known as directors’ report.
The registered company can only prepare the audited reports under the following conditions:
- Should have a corporate shareholder
- Sales turnover is more than S$5 million
- If the company’s shareholder count exceeds 20
Note: A company is deemed dormant during a period in which there have been no accounting transactions. A company may not be subject to auditing during this period, but it still must prepare unaudited financial statements.
Filing of Annual Return
Under the Companies Act, all Singapore-registered companies must file the annual returns within the time span of a month of completing their annual meeting or passing a resolution in place of one.
The Singapore incorporated company will need the following details to the filling of annual returns:
- Name & Registration Number
- A valid registered address
- All the Principle activities
- Type of Company during the financial year
- Complete details of Share Capital and shares
- Registered Charges
- All the details of Officers of the Company
- Details of Shareholders
- Dates of Annual Returns, Annual General Meeting and Accounts
- Financial statements (XBRL), if required
Filing Financial Statements in XBRL
The Company needs to submit the financial statements using XBRL while filing an annual report if the company falls into one of the following categories:
- Has a corporate shareholder for the financial year
Extension of Time
If your Singapore incorporated company needs more time to comply with the criteria to prepare the financial statement for holding the annual meeting and the annual report filing, you can apply for either one or two-month extension only once prior to the deadline.
Who is Responsible for Annual Filing?
According to the law, the Company Secretary is solely responsible for determining that the company submits all statutory reports on time.
Being the company’s directors, you must make sure that all the company’s financial statements are accurately prepared and comply with all the accounting standards.
Consequences in Case of Non-Compliance
Non-Compliance of Annual Return Filing with ACRA
The ACRA has the authority to penalize the Company for not complying with the Annual Return Filing with ACRA under any of the following situations:
- If the company does not organize the annual general meeting on time.
- If the company fails to submit the annual returns and financial statements within the provided deadline.
- If the financial statements presented by the Company at the Annual general meeting are not the updated records.
The company will be liable to pay the penalty of S$300 every time for not complying with the Annual Return filing. Recently, the ACRA has taken some serious actions against the company for failing to comply.
Non-Compliance of Filing Tax Returns with IRAS
If due to any of the reasons, the company fails to submit the ECI within three months following the financial year-end date, then it will receive a Notice of Assessment (NOA) from IRAS specifying the estimated company’s income.
Upon receiving the notice, if the company does not agree with the specified estimated assessment, the company will be required to file the notice of objections within two months following the date of notice of assessment. However, suppose the company fails to send the notice of objection. In that case, IRAS will consider it as a final estimate even if the Company’s actual income on the tax return is less than the provided estimate.
Compliance Rating and Certificate
Companies that comply with ACRA’s annual filing requirements will be awarded a green checkmark on its name in its online directory. The certificate of compliance can then be issued.
If a company does not follow these requirements, the company receives a Red Cross mark and is not eligible for the certificate.
An entrepreneur must follow the annual reporting requirements because anyone who wants to do business with them can find out their basic information and compliance rating on ACRA’s online directory.
It is the responsibility of every Singapore incorporated company to ensure that returns and forms are filed with ACRA and IRAS on a timely basis. However, for ACRA documents translation service, you can reach out to Singapore translators.