Month: March 2015

Many local and foreign entrepreneurs incorporate a Singapore company in order to take advantage of several benefits particularly in terms of taxation, limited liabilities from business-related debts, and bankruptcy protection.

If you are keen on forming a Singapore company, this article outlines the legal formalities when forming a Singapore company.

A Singapore corporation, its shareholders (the legal term for its owners) are required to perform certain formalities and legalities which aim to prevent abuses especially by the management, unscrupulous dealing, illegal activities, and tax evasion.

 

There are several formalities and legal requirements associated when operating a Singapore corporation but the most important is the submission of the annual filing requirement to the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS).

 

These are the other requirements which must be performed by the Singapore corporation:

 

Appointment of at least one director who is a local resident

A corporation should at least appoint one director who is a local resident or holder of Singapore EntrePass, Singapore Employment Pass, or Singapore Dependant Pass.  However, there is no limit on the number of board of directors whether they are foreigners or local residents.

 

Designate a qualified secretary

A company secretary should be a local resident and must have a knowledge and understanding in compliance matters stated by the Singapore Companies Act.  (The secretary should be appointed within six months after incorporating a company)

 

Use of registration number

The registration number, which is issued by ACRA, must be present on the company’s billings, letterheads, invoices, and documents used for its communication.

 

Annual general meeting

Within 18 months of incorporating a company in Singapore, the board of directors must conduct the annual general meeting in which they can answer the questions of shareholders.  After this, the succeeding meeting must be held once every fiscal year but not more than 15 months apart.

 

Directors’ report

This report includes the income statements, balance sheet, and other unaudited financial records; the interests and accounts of shareholders and directors; documents revealing the accounting policies of a corporation; and disclosure of a company’s operation.

Filing of the financial year-end record

 

ACRA uses this record as the basis for the deadline for the submission of a corporation’s accounting requirement and financial statement.

 

Submission of annual returns

This record, which must be filed to ACRA one month after the annual general meeting, should consist the financial accounts of a corporation.

 

Tax returns

This record, which includes the tax computation, director’s report, and Form C, is required to be submitted earlier than 31 October.

 

Form C

This document is filed every June after a fiscal year but may be extended until December if a corporation will file its estimated chargeable income (ECI) within three months after the accounting period has ended.

 

ECI

This record is an estimation of a corporation’s chargeable income for the “year of assessment” and should include the estimated profits, financial year-end record, and estimated revenue.

 

Audited or unaudited accounts

The branch office of a foreign company is required to submit its parent’s audited financial statement to IRAS.  However, the agency is less stringent to private limited companies with less than $ S5 million of turnover which is allowed to file unaudited accounts.