A director of a company has to comply with a series of statutory obligations under the Companies Act. The table below shows the deadline for each of the statutory obligation that ACRA takes enforcement on.
|Public Companies||Other Companies|
|Share capital within Singapore||Share capital and keep a branch outside Singapore||Share capital within Singapore||Share capital and keep a branch outside Singapore|
|Annual General Meeting (AGM)||Within 4 months after their FYE*||Within 4 months after their FYE||Within 6 months after their FYE||Within 6 months after their FYE|
|Filing of Annual Returns (AR)||Within 5 months after their FYE||Within 6 months after their FYE||Within 7 months after their FYE||Within 8 months after their FYE|
*Financial Year End
AGMs allow shareholders to question the directors on the management and financial performance of the company, and the AR provides critical information that helps the company’s stakeholders to make informed decisions. Because of the pertinence of the AGM and AR, ACRA has set a penalty framework for late annual lodgements to ensure compliance such that these statutory obligations on annual reporting are taken seriously.
ACRA will consider prosecuting the directors in court if:
- they fail to compound (when offered a chance to compound); or
- the circumstances of the case are such that composition is not appropriate (e.g. multiple breaches or recalcitrant breaches.
In court, the director can decide whether to plead guilty or claim trial to the charges. If the director is convicted by the court, he may be fined up to a maximum of $5000 per charge. If the director fails to attend court, a warrant for his arrest will be issued by the court.
Penalty for Breach of AGM Obligations
To avoid prosecution, ACRA allows companies and directors to pay a minimum compound fee of $300. A company and the directors who fails to meet the AGM requirements would be liable on conviction to a fine not exceeding $5000, as well as a default penalty. The court may also order a general meeting to be called on the application of any member.
Penalty for Late Lodgement of Annual Returns
As of 30th April 2021, Companies that file their AR late will be imposed with a late lodgement penalty of:
- $300 if the lodgement is filed within 3 months after the filing due date.
- $600 if the lodgement is filed after 3 months after the filing due date.
Disqualification of Directors for Filing Breaches
A director who is convicted of three or more filing related offences under the Companies Act within a period of 5 years, will be disqualified as a director. Once disqualified, he/she will not be allowed to be a company director or take part in the management of any local or foreign company for 5 years, effective from the date of the conviction.