Legislative Changes Relating to Annual General Meetings and Annual Returns for Singapore Companies
As part of on-going efforts to keep Singapore business friendly and competitive, legislative changes relating to Annual General Meetings (AGM) and Annual Returns (AR) timelines that will reduce the regulatory burden of companies have been implemented with effect from 31 Aug 2018. To provide greater clarity for companies and reduce the compliance burden, the timelines for holding AGM and the filing of annual returns will be aligned with the company’s financial year end (FYE).
Furtherance to the legislative changes, the following safeguards were put in place:
- companies must notify the Registrar of their FYE upon incorporation and of any subsequent change;
- companies must apply to the Registrar for approval to change their FYE:
- if the change in FYE will result in a financial year longer than 18 months; or
- if the FYE was changed within the last 5 years;
- unless otherwise approved by the Registrar, the duration of a company’s financial year must not be more than 18 months in the year of incorporation; and
- only FYE of the current and immediate previous financial year may be changed (provided that statutory deadlines for the holding of AGM, filing of annual return and sending of financial statements have not passed).
Private companies exempting from holding AGM
Under the Companies (Amendment) Act 2017, private companies are exempted from holding AGM if all members have approved a resolution to dispense with the holding of AGM and if they send their financial statements to members within 5 months after the FYE.
The following safeguards are put in place:
- A member who wishes to request that an AGM be held must notify the company to hold an AGM not later than 14 days before the last day of the 6th month after FYE;
- Directors must hold an AGM within 6 months after FYE if notified by any one member of the company to do so. The company may seek the Registrar’s approval for an extension of time to hold AGM; and
- Private companies must hold a general meeting to lay financial statements if any member or auditor requests for it not later than 14 days after the financial statements are sent out. Directors must, within 14 days after the date of request, hold a general meeting to lay the financial statements.
Private dormant relevant companies exempt from preparing financial statements do not need to hold AGM, subject to the above-mentioned safeguards.
Simplified process for solvent exempt private companies and dormant private relevant companies to file Annual Returns
With effect from 31 August 2018, solvent exempt private companies and private dormant relevant companies will be able to file simplified annual returns with greater ease as ACRA will now pre-fill most of the information in the AR form. These companies need only select the available options and dates indicated, and verify that the information is correct before submission. This will greatly reduce the time and effort taken to file annual returns.
Similar to the current process of filing annual returns, the Simplified Annual Returns can be filed only:
- after an AGM has been held if the company needs to hold an AGM; or
- after financial statements is sent to members if the company need not hold AGM; or
- after FYE for a private dormant relevant company that is exempted from preparing financial statements.
Which companies are eligible to file Simplified Annual Returns?
Companies with FYE ending on or after 31 August 2018 and have declared themselves as “Solvent Exempt Private Company” or “Private Dormant Relevant Company” in their last Annual Return, will be eligible to file Simplified Annual Returns if they fulfil the following requirements:
- the company is not preparing audited financial statements; and
- the company is not required to file financial statements with ACRA.
Should you have any questions please contact Samantha Chia, Managing Director of Zetland Singapore office at samanthac@zetland.biz or +65 6557 2071
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