In order to function legally, private limited firms in Singapore are subject to a number of annual compliance obligations. This entails complying with the requirements of the Companies Act, keeping accurate financial records, paying company taxes in accordance with the law, getting required licences, and upholding applicable employment rules. To keep a track of everything, seeking legal advice is necessary and Vakilsearch experts can assist you with it.
What Are the Companies Act Requirements?
Singapore is renowned for its strong regulatory framework and business-friendly policies. It strongly supports startups and small-scale businesses. Private limited firms must abide by a number of annual compliance requirements in Singapore in order to conduct business legally. Know about Private Limited Company in Singapore.
The main piece of legislation governing businesses in Singapore is the Companies Act. Private limited businesses must adhere to the following annual compliance obligations under the Businesses Act:
- AGM, or annual general meeting An AGM must be held by private limited corporations within six months of the conclusion of their fiscal year. The financial accounts of the company must be distributed to the shareholders for approval at the AGM.
- Annual Return is within one month following their AGM, private limited businesses are required to submit an Annual Return to the Accounting and Corporate Regulatory Authority (ACRA). Information regarding this is provided in the Annual Return.
What Are the Accounting Requirements for Singapore Company?
The Singapore Financial Reporting Standards (SFRS) require private limited firms to prepare financial statements and keep accurate accounting records. A qualified auditor must audit the financial accounts, and the audit report must be filed to ACRA together with the business’s annual return.
At the conclusion of the accounting period, all Singaporean enterprises are required to prepare financial statements. The profit and loss statement, balance sheet, cash flow statement, and statement of changes in equity should all be included in the financial statements.
Annual General Meetings (AGMs) must be held annually by all Singaporean corporations. The directors will give the shareholders a presentation of the financial statements at the AGM.
Singapore businesses are expected to have accurate bookkeeping records. All financial transactions, such as invoices, receipts, and payments, should be documented.
If a company has more than 1 million SGD turnover, then GST registration and the necessary documents are necessary as well.
Corporate Taxation in Singapore
Singapore’s private limited enterprises must pay corporate tax on their income. Singapore currently has a 17% corporate tax rate. Within six months following the end of their fiscal year, private limited firms must submit their corporation tax reports to the Inland Revenue Authority of Singapore (IRAS).
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Licensing Requirements for Singapore Company
Private limited firms in Singapore might need to get a variety of licences and permissions to function legally, depending on the nature of their operation. Business licences, work permits, and employment passes are a few examples of common licences and permissions.
Employment Law
Private limited companies in Singapore must comply with various employment laws, such as the Employment Act and the Central Provident Fund Act. These laws govern matters such as minimum wage, working hours, and contributions to employees’ Central Provident Fund accounts.
Corporate Compliance in Singapore
Private limited companies in Singapore are required to comply with various corporate compliance requirements, such as maintaining a registered office address, appointing a company secretary, and filing annual returns with ACRA. Failure to comply with these requirements can result in fines and penalties.
What is the penalty for not holding an AGM?
The penalty for not holding an AGM can be up to $5,000, which is roughly ₹3,72,500.
Is it mandatory for private limited companies to appoint a company secretary?
Yes, it is mandatory for private limited companies to appoint a company secretary within six months of their incorporation.
How often do private limited companies in Singapore need to file their financial statements?
Private limited companies in Singapore must file their financial statements annually.
What is the current corporate tax rate in Singapore?
The current corporate tax rate in Singapore is 17%.
Can a foreigner be a director of a private limited company in Singapore?
Yes, a foreigner can be a director of a private limited company in Singapore, provided that they meet certain requirements.
Conclusion:-
Maintaining a company’s legitimacy and compliance with regulations requires annual compliance for private limited companies in Singapore. Companies are required to abide by the Companies Act’s regulations as well as accounting and tax rules, licencing requirements, and employment laws.
These requirements must be followed or else penalties or legal action may be taken. Companies in Singapore can stay out of trouble with the law and run efficiently by keeping up with the most recent compliance regulations. To stay compliant with all the company regulations and for any clarifications, you can get in touch with our experts at Vakilsearch.
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