Wednesday, 23 December, 2015

ACRA: Singapore Watchdog Penalises Late Company Filing

On 1 December 2015, the Accounting and Corporate Regulatory Authority (ACRA) introduced firmer penalties for companies that are late in holding annual general meetings (AGMs), present outdated financial statements to an AGM and are late in filing annual returns.

According to ACRA’s statutory requirement, a company must conduct an AGM within 15 months of the previous AGM or within 18 months for newly incorporated companies. All accounts presented at the AGM must not be more than six months old, and a company must file an annual return within one month of the AGM.

ACRA has increased the penalties for those who break the rules: the company and its directors may face a penalty of between SGD 300 and SGD 900 for each non-compliance and could be fined up to SGD 5,000. As an example, on 14 April 2014, three company directors were brought to court and fined a total of SGD 17,800 for failure to submit annual returns and hold AGMs on time. They were charged and convicted in the State Court for breaking two basic statutory requirements under the Companies Act. According to Mr Kenneth Yap, chief executive of ACRA, ACRA is insisting on harsher penalties to emphasise that ‘directors need to take their statutory duties on annual reporting seriously’.

Other director duties are also being enforced more tightly by ACRA. From the first quarter of 2016, if a company board member is found to have three companies struck off by the Registrar within the past five years, the board member may be banned from the date the third company is struck off. Furthermore, from the beginning of 2016, any director or company secretary may be debarred if they are caught in breach of a relevant requirement of the Companies Act for a consecutive period of three months or more.   

For more information on ACRA and regulation changes, please contact Richalle Wee.  

 

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