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So, you have incorporated your business and are ready to get started. However, a company is not automatically ready to start doing business once its formed. Most businesses will have to address operational matters like work passes, staffing, office space and accommodation as well as business licensing.
Accounting standards in Singapore are now prescribed in the Companies Act and are known as Financial Reporting Standards (FRS).
Financial accounts of the company must be prepared in accordance with the Singapore FRS and must consist of the following:
A company, unless exempt, is required to submit its audited financial statements, in XBRL, within one month of its Annual General Meeting (AGM).
An audit exemption is available for small private companies which are defined as those that meet two out of the three criteria detailed below:
Every company must hold an AGM within 6 months from the financial year end date. The following general rules apply to AGMs:
Notwithstanding the above, the reference to any act that ought to be transacted at an AGM shall still be transacted by way of a resolution by written means.
Every company must lodge an Annual Return (AR) with ACRA within 7 months from the financial year end. Particulars of the company officers, registered address, and auditors (if applicable) must be included in the AR. A full set of accounts in XBRL format, according to a minimum requirement list within the new ACRA Taxonomy 2013 must also be attached with the AR.
Certain companies are exempt from attaching their accounts to the annual return being:
All Singapore companies are required to file annual tax returns with the Inland Revenue Authority of Singapore (IRAS).
There are two separate filings required as part of the annual tax returns:
If a company fails to submit its ECI return they will receive a Notice of Assessment (NOA) detailing an estimation of the company’s income. Even if the company disagrees and intends to file a Notice of Objection is, they must settle the estimated charge within one month.
If a company fails to submit its tax return and / or Form C there are many levels available to the tax authorities:
If filing has not been done within 2 years, the company will receive penalties and a fine of up to SG$1,000.
A company must also ensure it registers for GST and submits quarterly returns if its taxable turnover is expected to exceed $1 million unless otherwise exempt. The expectation should be based on agreed contracts, accepted orders, or agreed quotations. It should not be based on market assessment or business plans.
A company is exempt from registering for GST if taxable turnover is wholly or mainly from zero-rated supplies and therefore may apply for an exemption from registration.
A company must register within 30 days from when the liability, or projection, arose. Late registration will result in one of the following:
If such a situation arises it is always best to provide full disclosure to mitigate any potential penalties.
Ensuring you undertake all necessary post-formation and ongoing requirements, such as annual report and franchise tax filings, for your business is important. Doing so, helps protect the personal assets of owners (protects the corporate veil) and keeps your company in good standing with its state of incorporation, which means your company has met all state requirements in a correct and timely manner.
After incorporation, establish a business calendar for yourself that notes all the important steps and deadlines for your company. In Singapore, these tasks can be straightforward however, given the advanced nature of the tasks, it may be best to seek professional help.
This article is produced by Hawksford and does not constitute legal advice. It is intended to provide general information only.
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