The hallmark of doing business in Singapore is that great emphasis is placed on executing high levels of corporate governance. Singapore's institutions are constantly working towards building corporate governance and the recently announced measures by Singapore's Accounting and Corporate Regulatory Authority, ACRA, demonstrates this vision. In a bid to encourage Singapore companies to voluntarily comply with regulatory requirements, ACRA has introduced three non-penal measures to tackle the issues of timely preparation of annual financial statements, holding of Annual General Meetings (AGMs) and filing of annual returns.
The three measures include:
* Color-coded Compliance Rating and Certificate of Compliance: Companies that possess a good record for holding timely AGMs, tabling and filing up-to-date financial statements, and filing annual returns will be green ticked as having a positive compliance rating by ACRA, while companies that are non-compliant will be negatively rated with a red cross marked against them. Furthermore, green ticked companies are eligible for a Certificate of Compliance issued by ACRA. This rating will be reflected on ACRA's free online Directory of Registered Entities that is available for inspection by the public.
* End of Financial Year (FY) Reminder Letters: Effective May 2010, ACRA will issue alert letters to private and non-listed public companies prior to the financial year-end as a reminder to take necessary action to meet their regulatory requirements.
* Shorter Extension of Time: Currently, companies can apply for extension of time of up to three months to hold their AGM. Effective July 2010, ACRA would allow an extension of up to two months only. This move is to ensure that financial statements lodged are not outdated.
For details, refer to ACRA's media release.
According to ACRA the three requirements of holding AGMs, preparing financial statements and filing annual returns are the most common compliance breaches by Singapore companies.
Most companies are focused on growing their business and may either be unaware of their compliance requirements or may tend to pay insufficient attention to the ongoing compliance requirements for Singapore companies. We at Janus offer ongoing administration services and would be happy to help you build your governance framework by ensuring that your company complies with all the regulatory requirements.
Thinking about setting up a business in Singapore? Learn more about Singapore company incorporation.
Roger Lee is a Singapore-based freelance writer who writes on a wide range of topics on doing business in various jurisdictions. For more information on topics discussed in this article, refer to Singapore company incorporation and HongKong company registration guides.