Singapore Private Limited Companies have certain annual statutory compliance obligations and filling requirements. This is LOL’s guide to understanding these annual statutory compliances under the Singapore Companies Act.
Accounting & Bookkeeping
Companies have to maintain proper records and accounts of business transactions. Most small and medium sized companies choose to do this by using an off the shelf accounting software and more recently many companies are also choosing to move to the cloud for their accounting due to the many benefits of cloud accounting.
Presentation of Financial Statements
Companies are required to prepare and present financial statements to all shareholders. The statements have to comply with the Singapore Financial Reporting Standards (SFRS). SFRS is substantially similar to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). Financial statements and accounting records need to be audited on an annual basis. However, companies that meet the small company criteria are exempted from this audit requirement.
Annual General Meeting and Annual Return Filling with ACRA
Companies must hold Annual General Meetings (AGM) of their shareholders within six months of their financial year end. They must then file an Annual Return (AR) with ACRA within seven months of their financial year end. New Companies Act amendments came into effect on 31 Aug 2018. Now, companies will be exempt from the AGM requirement if they send financial statements to all shareholders within five months after the financial year end. This is provided no shareholder requests for an AGM within specified timelines. If AGM-exempt, all matters which are to be dealt with at the AGM can be settled through the passing of written resolutions.
Filling of XBRL Financial Statements
Some companies also need to file their financial statements with ACRA by converting them into an XBRL format. XBRL stands for eXtensible Business Reporting Language which is an XML-based format for financial documents that businesses use to exchange financial information. Companies that meet the exempt private company definition do not need to file XBRL financial statements.
Annual Tax Return Filling with IRAS
Companies have to file Estimated Chargeable Income (ECI) to IRAS within three months of the company’s financial year end. ECI filling waiver applies if annual revenue is not more than $5 million and ECI is nil. Additionally, companies have to file their annual corporate income tax return by November 30 for paper filing (or December 15 for electronic filing) of the year following their year end.
Definitions and Criteria:
- A small company is any company that meets 2 of the 3 criteria: total annual revenue less than S$10 million, total assets less than S$10 million, fewer than 50 employees.
- An exempt private company is a company with no more than 20 shareholders and no corporate shareholders.
- A dormant company is one that has not carried on any business and has no accounting transactions other than for maintenance (e.g. appointment of company secretary, maintenance of registered office, payment of fees to ACRA)