Beyond incorporation part 1: Common requirements on post-incorporation regulatory matters
Even if you have registered your company in Singapore does not necessarily mean that you are ready to do business. There are many operational matters to look into before your company is ready for operations, such as applying for work passes, looking for an office space and tasks related to statutory regulations. In Part 1 of this the Beyond Incorporation series, we cover some of the common requirements on regulatory matters that you need to fulfil after you have incorporated your company.
So you have incorporated your business and ready to get started. However, a business entity is not automatically ready to start doing business upon formation. Most businesses will have to address operational matters such as work passes, staffing, office space and accommodation as well as business licensing.
There are also a number of tasks that a new company has to complete before it can commence operations. Some of these tasks relate to statutory regulations, such as setting up statutory books, and registering for taxes and licenses. A business entity must also stay “in good standing” with the Accounting and Corporate Regulatory Authority to maintain its legal status.
In this three-part series, we will discuss some of the things that you need to consider post-incorporation. This article will cover the first part – requirements for regulations you need to adhere to after you have set up your company.
1. First Board Meeting
In the early stages of your new company, the directors shall convene the first board meeting or pass the first board resolution relating to the "organisation” of the company which should include:
- Adopting the Constitution that govern the internal operations of the company
- Adopting the use of a company seal
- Authorising the issuance of shares and other types of securities
- Appointing officers
- Confirming the registered office address
- Confirming the first financial year end
- Appointing an auditor, if required
- Making banking arrangements
- Taking care of any other business
2. Adopting Company Seal
The company may have a seal for sealing official documents. Often known as a “common seal,” these seals are metallic, ink-free, and leave an embossed impression of the company’s name and registration number on official documents such as share certificates and loan documents. The Seal shall be kept under the control of the company secretary and must be authorised by the board prior to be used each time. The documents to which the Seal is affixed must usually be countersigned by any two directors or one director and the company secretary.
3. Issuing Share Certificates
A Share Certificate is a legal document that certifies ownership of a specific number of shares in a corporation. It is mandatory for Singapore companies to issue share certificates to all of its shareholders. These certificates should be issued under the company seal and signed either by two directors, or by one director and the secretary. Share certificates are usually kept by individual shareholders and should be reissued when the shares are transferred, split, consolidated or reclassified.
4. Appointing Company Secretary
Every company must appoint a local company secretary, who is primarily responsible for the administrative and reporting duties required by Singapore laws.The company secretary must therefore have the requisite knowledge and experience to discharge the functions of a company secretary. If there is any change in the particulars of the company secretary, the company must notify the Accounting and Corporate Regulatory Authority (ACRA) within 14 days of the date of change.
5. Appointing Chief Executive Officer (CEO)
A company may appoint a CEO. A CEO is any one or more persons who is principally responsible for the management and conduct of the business of the company. If there is such a person or persons appointed as the CEO or if there is any change in the particulars of the CEO, the company must notify ACRA within 14 days of the date of appointment or change.
6. Registered Address
A company must have a registered office in Singapore which must be open and accessible to the public during normal office hours. If there is any change in the address of the registered office, the company must notify ACRA within 14 days of the date of change.
7. Financial Year End (FYE)
Every company must fix a Financial Year End (FYE) upon incorporation and it is at the company’s discretion to decide on the FYE. The duration of a company’s financial year cannot be more than 18 months in the year of incorporation.
In the event that the FYE is changed after incorporation, only the FYE of the current and immediate previous financial year may be changed and this is provided that the statutory deadlines for the holding of annual general meeting, filing of annual return and sending of financial statements have not been passed. Otherwise, the company must apply to the ACRA for approval to change the FYE:
- If the change in FYE results in a financial year end longer than 18 months
- If the FYE has been changed within the last 5 years
8. Appointing Auditor (if applicable)
Singapore companies are exempt from appointing an auditor if they are dormant or satisfy two out of the following three conditions for the immediate past 2 consecutive financial years:
- The total annual revenue of the company must not exceed S$10 million
- The total assets of the company for the financial year end must not exceed S$10 million
- The number of full-time employees at the end of the financial year must not exceed 50
9. Setting up Statutory Books
All companies are required to maintain statutory books, in particular, register of beneficial owners (termed as registrable controllers) and register of nominee directors. Such statutory books are the legal records of your company which are kept at its registered office in Singapore, and the information therein must be made available to the Authorities and public agencies upon request. They must contain:
- Up-to-date information about the registrable controllers and corporate officers such as directors, auditors, and secretaries
- A list of shareholders, the number of shares they own and details of any share transfers
- Information about fixed or floating charges and debentures used to secure any borrowing by the company
- Resolutions and minutes from AGM meetings