Your Step-by-Step Guide to Annual Return Filing

Key Takeaways

• Annual return filing in Singapore is a legal requirement for companies to maintain updated information with the Accounting and Corporate Regulatory Authority and the Inland Revenue Authority of Singapore, which is crucial for transparency and avoiding penalties.
• Key components of an annual return include up-to-date company details, submission of financial statements and accurate particulars of company officers, all of which contribute to providing a clear picture of the company’s financial health and governance.
• The annual return filing process for Singapore incorporated companies entails meeting specific timelines such as filing within 7 months after the FYE, holding AGMs (Annual General Meeting) or opting for written resolutions and adhering to tax filing obligations with IRAS, with the possibility of seeking professional assistance to ensure compliance.

What Is Annual Return Filing?

So, what is annual return filing? It’s a legal obligation for Singapore incorporated companies to keep their information current with the Accounting and Corporate Regulatory Authority (ACRA), thereby ensuring stakeholders are informed about the company’s composition, business activity and financial health. The process involves several stages, from the preparation and submission of accounting and financial statements to holding the company's annual general meeting. It’s not just about ticking boxes; it’s about demonstrating your company’s commitment to transparency and good governance.

Failure to file your annual returns by the required date can lead to enforcement actions against your company officers. Therefore, it’s crucial to understand the annual filing requirements and adhere to them. But don’t fret; we’re here to guide you through this journey, one step at a time.

The role of ACRA

Firstly, let’s take a moment to understand the role of ACRA in this process. ACRA is the governing body responsible for ensuring compliance with the Companies Act in Singapore. They oversee the annual filing process, ensuring that all locally incorporated companies adhere to the regulations and file annual returns timely. Failure to comply with these requirements can result in enforcement actions against the company officers.

Therefore, understanding ACRA’s role is the first step toward successful annual return filing.

The role of IRAS

Next in line is the Inland Revenue Authority of Singapore (IRAS). IRAS is responsible for the assessment and collection of corporate income tax in Singapore, ensuring companies meet their tax obligations. It requires companies to:

• File two corporate income tax returns annually: the Estimated Chargeable Income (ECI) and the Form C-S/Form C-S (Lite)/Form C
• File the ECI within three months from the ending date of a company’s financial year
• File the actual income tax return by November 30 each year

These filings have to be done within strict adherence to each date to avoid penalties.

Having a clear understanding of IRAS’s role is crucial in navigating your return filing journey.

Key Components of an Annual Return

Now that we’ve understood the roles of ACRA and IRAS let’s delve into the key components of an annual return. At its core, an annual return is about providing accurate, up-to-date information about your company to the relevant authorities. It requires the company to file accounting and financial statements such as the balance sheet, income statement, and cash flow statement by a stipulated date. These financial statements offer an overview of the company’s financial status, providing insights into its profitability, liquidity, and financial stability.

In addition to financial statements, an annual return also includes your company’s shares details.

Your company's shares details will include the number of shares held, issued share capital, and the paid-up share capital. Let us briefly look at each of these terms.

Number of shares held

The number of shares held refers to the total number of shares that each shareholder owns in a company.

Issued share capital

This is the total value of shares that a company has issued (sold) to shareholders. It is calculated by multiplying the number of shares issued by their nominal (or par) value.

Paid-up share capital

This refers to the portion of the issued share capital that has been fully paid for by the shareholders. If a company issues shares at a certain price and the shareholders pay this amount in full, those shares are considered "fully paid." In actual terms, paid-up share capital represents the actual funds received by the company from members in exchange for shares.

These financial particulars about your company is crucial in providing a complete picture of its financial health.

Another crucial component is the Management Discussion and Analysis (MD&A) of a business. This is a section of your annual report or quarterly filing where the management submit a narrative explanation of the accounting and financial statements to the company's stakeholders. It offers the management's perspective on the company's financial performance, condition, and particulars of future prospects.

Company details verification

One of the key components of an annual return is the verification of the company's information. This involves a company details confirm process, ensuring the accuracy of your company’s information with ACRA, such as business activities, registered office address, and share capital. The importance of this process cannot be overstated.

Having accurate and up-to-date company details on ACRA’s register is a legal requirement and it also helps the company's stakeholders make informed decisions about your company.

File financial statements

Another critical aspect of an annual return is to file financial statements in each calendar year. Your company's financial statements provide a comprehensive overview of your company’s financial standing and include financial information such as:

• Equity
• Assets
• Liabilities
• Financial performance
• Changes in cash flow

However, it’s important to note that certain exemptions, depending on the company type and your business activities, apply when you file financial statements.

For instance, companies with no more than 20 shareholders and no corporate shareholders may not be required to file financial statements.

Particulars of company officers

The annual return must also include the particulars of your company officers. This includes their details, such as:

• Full name
• Nationality
• Contact information
• Residential address

It’s crucial to ensure that these details are accurate and up-to-date, as they form part of the official records on the ACRA register.

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By When and How Is a Company Required To File Annual Returns?

Navigating a Company's Annual General Meeting AGM

Now, let’s explore another integral part of the return filing process - the company’s Annual General Meeting (AGM). As per the Companies Act, all Singapore incorporated companies are required to hold an AGM, where important decisions are made and the financial statements are approved by the company's stakeholders.

However, organising an AGM can be a complex task, with several requirements, timelines, and potential penalties for non-compliance. But don’t worry! We’re here to guide you through it.

Holding AGMs- all requirements

Under Section 175 of Singapore’s Companies Act, companies are required to conduct an AGM. Your company must submit the date of its AGM along with its annual return. If a company convenes an AGM upon a member’s request, a ‘Notification of AGM’ must be filed through BizFile+.

Navigating these requirements can be challenging, but understanding them is crucial to ensure compliance.

Annual general meeting, AGM timelines and penalties

The timelines for holding an AGM depend on your company’s financial year-end. For instance, Singapore private limited companies with a financial year ending before August 31, must hold their first AGM within 18 months of incorporation, and subsequent AGMs can be no more than 15 months apart.

Late lodgment penalties are issued for overdue filing of Annual Returns, with the possibility of further enforcement actions by ACRA.

Written resolutions as an alternative to the AGM

Did you know that written resolutions can serve as an alternative to AGMs?

Private companies in Singapore may opt for this route if all voting shareholders agree on dispensing with AGMs through written resolutions. However, incorporated companies are required to ensure that AGM-related matters, such as the distribution of all the documents, signed financial statements and resolutions, are handled within six months of the financial year-end date.

Tax Filing Obligations with IRAS

Beyond annual returns and AGMs, there’s another crucial part of the compliance puzzle - tax filing. A business operating in Singapore is mandated to submit a corporate income tax return if its income exceeds $22,000 or if they have income derived from Singapore as non-residents. Each business in Singapore is required to annually submit Estimated Chargeable Income (ECI) and a formal income tax return using either Form C-S, Form C-S (Lite), or Form C to IRAS.

Knowing your tax filing obligations is crucial to ensuring smooth sailing in your annual return filing journey.

Filing ECI

Filing Estimated Chargeable Income (ECI) is a critical part of your tax filing obligations. The date to file ECI in Singapore is within three months after the end of their financial year. However, a waiver for ECI filing is available for companies with an annual revenue of $5 million or below, provided they have a nil ECI for the Year of Assessment.

But remember, even if you qualify for a waiver, you’re still required to file a formal income tax return.

Corporate income tax return forms

Depending on the company type, there are different types of corporate income tax return forms, including Form C-S, Form C-S (Lite), and Form C. The form to be used depends on your company’s category.

For the 2024 Year of Assessment, companies are granted a Corporate Income Tax Rebate of 50%, capped at a maximum of $40,000. The computation of the tax rebate is done automatically by the tax authority, based on the corporate income tax return forms that your company submits.

Seeking Professional Assistance

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Choosing the right company secretary

Choosing the right company secretary is another important decision that can affect your annual return filing process. A company secretary handles important administrative tasks such as maintaining statutory registers, filing annual returns, and organising board meetings. They ensure that your company operates within the bounds of the law, helping to avoid penalties and legal risks.

By outsourcing corporate secretarial services to a local company, business owners can focus on their core activities, all while remaining compliant with legal and regulatory requirements.

Summary

In conclusion, the filing of annual returns is a multi-faceted process, encompassing a range of activities from verifying company details to submitting financial statements, holding AGMs, and fulfilling tax obligations. Navigating this process may seem daunting, but with a clear understanding of the documents involved, requirements, timelines and the help of professionals, it becomes a manageable task. The journey to compliance might be complex, but remember, it’s a journey that leads to transparency, good governance, and ultimately, the success of your business.

You could also make the day-to-day running of your company easier with a company secretary and accounting services from Osome.

Access our dedicated and expert support and services for your your business and do away with the hassle of managing routine tasks. Whether you need to file financial statements, keep track of tax deadlines, file documents and taxes or stay compliant-our services encompass it all. With offices in Singapore, Hong Kong and the UK, we are more than capable of meeting the accounting and corporate regulatory needs of a foreign company or local company in Singapore.

Gabi Bellairs-LombardBusiness Writer

Gabi's passionate about creating content that inspires. Her work history lies in writing compelling website copy and content, and now specialises in product marketing copy. When writing content, Gabi's priority is ensuring that the words impact the readers. As the voice of Osome's products and features, Gabi makes complex business finance and accounting topics easy to understand for small business owners.

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