What are the Legal Requirements When You Form
a Singapore Company?
By John Media
Forming a Singapore company offers several advantages particularly in terms of
limited liability, bankruptcy protection, and tax benefits and exemptions.
However, the best advantage that you get when you form a Singapore company
is that it is treated as a separate legal entity apart form its stockholders. Like a
real person, an incorporated Singapore Company can acquire or sell a property
under its name, file a lawsuit using its name and can be named in a case, and
continue its existence regardless of who are the shareholders and board of
directors. These advantages, have encourage many local and foreign
entrepreneurs to incorporate their companies in Singapore.
Meanwhile, corporations are required to meet a wide array of formalities and
legalities stated by the Singapore Companies Act in order to prevent
unscrupulous dealings, illegal trading, and tax evasion.
While there are several legalities which must be met, the most important is the
annual filing requirements which must be submitted to the Accounting and
Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of
Singapore (IRAS).
These are the basic legal requirements for a Singapore Corporation:
Appointment of a company secretary
Within six months of incorporating a company in Singapore, shareholders should
appoint a secretary who must be a local resident of Singapore and has a
knowledge in handling all the compliance matters under the corporate law.
Annual general meeting
This meeting, which is a required corporate formality, should be held within 18
months of incorporating a company. The succeeding meeting wi ll then be held
once every year but not more than 15 months apart.
Directors’ report
This document must consist the following: the shareholders and directors’
interests and accounts; unaudited financial statements such as the balance
sheet and income statement; and documents revealing the accounting policies
of a corporation.
Annual returns
The annual returns, or the financial accounts of a company, are filed to ACRA
one month after its annual general meeting.
Financial year-end documents
This will be the basis for the deadline for the submission of financial
statements and accounting requirements.
Registration number
A corporation will receive its business registration number to ACRA which must
be present on its letterheads, invoices, billings, and other do cuments used for
communication purposes.
Estimated chargeable income (ECI)
This is an estimate of a company’s chargeable income for the “year of
assessment” and includes the following information: estimated profits,
financial year-end, and estimated revenue.
Tax returns
This should include the tax computation, director’s report, and Form C which
must be submitted earlier than 31st of October.
Form C
This requirement must be submitted every June after a fiscal year but may be
extended until December if a corporation has already submitted ECI within
three months after the end of the accounting period.
Audited or unaudited accounts
IRAS allows private limited company with less than $S5 million of turnover to
file unaudited accounts. But for the branch offices of foreign companies, they
are required to submit even the parent’s audited financial statement.