Filing Annual Returns For Your Business
As a small company just starting out, filing your Annual Returns can be a somewhat precarious task. In addition, you will have to deal with other issues such as legal compliance. To make the process of filing your Annual Returns a smooth-sailing one, here are the key requirements you need to know.
Is Your Company a Public or Private Company?
To begin filing your Annual Returns, it is important to first ascertain which category in ACRA your company belongs to.
In general, companies are classified into 2 main categories: public and private.
If your business has more than 50 shareholders, is limited by a guarantee and is listed on the Singapore Exchange (SGX), it is considered a Public company.
Private companies refer to non-listed companies. They are further divided into 2 categories – Exempt Private Companies (EPC) and Non-EPC Companies:
- EPCs are private companies with at most 20 shareholders, where none of these shareholders are corporations.
- Non-EPC companies are private companies with more than 20 but at most 50 shareholders.
Is Your Company Solvent?
Once you have ascertained which category your company falls under, it is also important to determine the solvency of your company. There are different filing requirements for companies that are solvent (i.e. able to pay their debts as and when these fall due) and companies that are insolvent (i.e. unable to pay their debts as and when these fall due).
A company is considered insolvent if:
- A creditor has served a statutory demand on the company for a sum of more than S$15,000, and the company fails to pay the sum, or to secure or compound it to the creditor’s reasonable satisfaction, 3 weeks from the date the demand was served;
- A creditor tries to enforce a court judgment or order for a certain sum of money against the company, but is unable to recover the entire sum; or
- It is proven to the court’s satisfaction that the company is unable to pay its debts (after taking the company’s contingent and prospective liabilities into consideration).
Do You Need to File Financial Statements with Your Annual Returns?
There are 2 types of filing of Annual Returns:
- With financial statements
- Without financial statements
All Singapore-incorporated companies, public and private, are required to submit the standard full set of XBRL financial statements together with their Annual Returns, with the exception of:
- Solvent EPCs
- Companies regulated by MAS (which need to file their financial statements using a special XBRL template)
- Companies allowed by law to do otherwise (for example, companies limited by guarantee need only file the PDF copy of the board-authorised financial statements)
If your company is a solvent EPC, you are exempted from filing financial statements with your Annual Returns, though you are still encouraged to do so. Instead, you will just need to complete an online declaration of solvency when filing your Annual Returns.
If your company is an insolvent EPC, you are not exempted from filing financial statements. If your company is considered a “smaller and non-publicly accountable company”, you are to file your financial statements in a simplified XBRL template with a PDF copy of the board-authorised financial statements. Otherwise, you are to file the full set of XBRL financial statements.
A “smaller and non-publicly accountable” company refers to a company:
- Whose revenue and total assets for the financial year each do not exceed S$500,000, and
- Is not a listed company or a financial institution such as a bank.
In summary, you will be exempted from filing financial statements with your Annual Returns only if you are a solvent EPC. If your business falls into other categories, you will have to file financial statements with your Annual Returns, albeit in different formats depending on which category your business falls under.
Simplified Process for Filing Annual Returns
Under the simplified process for the filing of annual returns, some of the information to be filed will be “pre-filled”. Companies need only review the pre-filled information (which is based on the previous annual return filing), and double-check that such information is still up to date.
What needs to be done before filing the simplified Annual Returns?
Before filing the simplified Annual Returns, your company must have first held its annual general meeting (AGM). If your company is not required to hold an AGM, its financial statements must first be circulated to all company members.
For private dormant relevant companies that are exempted from filing financial statements, or that have dispensed with the AGM requirement, the simplified Annual Return can be filed after their FYEs.
How to file simplified Annual Returns
Using the BizFile+ website
If your company is eligible for filing simplified Annual Returns, you will be given the option to do so upon logging into BizFile+ and selecting the “Annual Return by Local Company (For FYE from 31 August 2018)” transaction.
By When Must Annual Returns be Filed?
Annual Returns must be filed within the following timelines:
|Type of Company||When Must Annual Returns be Filed By?|
|Public-listed||If the public-listed company has a share capital and keeps a branch register outside of Singapore: Within 6 months after FYE|
|For other public-listed companies: Within 5 months after FYE|
|Non-listed||If the non-listed company has a share capital and keeps a branch register outside of Singapore: Within 8 months after FYE|
|For other non-listed companies: Within 7 months after FYE|
Who Can Submit the Annual Returns?
The director or other officer of the company is required to submit the company’s Annual Returns via BizFile+. Alternatively, professional corporate secretarial firms also offer services that assist the company with statutory obligations like the holding of an AGM and the subsequent filing of the company’s Annual Returns.
Failure to submit the Annual Returns will incur late lodgment fees and companies are therefore advised to engage a corporate secretarial firm to ensure that they are not penalised for such breaches.
How many directors are needed for filing your Annual Returns?
If your company has one director, he/she is required to sign off on the documents to be submitted with the Annual Returns.
If your company has more than one director, then at least 2 directors have to sign off on the documents to be submitted with the Annual Returns.
Finalising the Filing of Your Annual Returns
Here is a summarised checklist on what to do before filing Annual Returns:
- Determine which category in ACRA your business falls into
- Determine the format of financial statements to be filed (if they need to be filed) with your Annual Returns
- Hold your AGM or circulate the financial statements to all company members if your company does not need to hold an AGM
- Ensure that the correct number of directors sign off on the documents for the filing
Once these preparation steps have been completed and all considerations have been accounted for, companies will have to file their Annual Returns on BizFile+.
Penalties for Failing to File Annual Returns
Companies and every director who fails to file annual returns may be given a chance to compound for the breaches such as paying a composition sum of $500 per breach instead of facing prosecution.
Separately, a late lodgment fee will be imposed at the time of lodgment, for each return that is lodged late. The late lodgment fee is $300 if the return is lodged within 3 months of the deadline for filing annual returns, and $600 otherwise.
ACRA will consider prosecuting the directors in court only if:
- They failed to compound the offence when offered a chance to compound; or if
- ACRA is not prepared to let the directors compound the offence.
Companies that fail to file annual returns for consecutive years can be struck off by the Registrar.
Filing your Annual Returns can be daunting for small companies. However, with a thorough preparation process prior to the filing, the job becomes easier and more straightforward. You may also engage a corporate secretarial firm if you need professional assistance with filing your Annual Returns.
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