FAQ
Frequently Asked QuestionsFAQ
Frequently Asked Questions
How many years should the company’s records be kept?
How long does it take to review my request?
What are the filing deadlines?
(1 Apr – 30 Jun) 31 Jul 2021
File Estimated Chargeable Income (ECI)
(Jun year-end) 30 Sep 2021
File GST return
(1 Jul – 30 Sep) 31 Oct 2021
e-File Corporate Income Tax return (Form C-S/ C)
30 Nov 2021
File Estimated Chargeable Income (ECI)
(Sep year-end) 31 Dec 2021
What is meant by compilation of financial statements?
Is it necessary to file financial reports in full XBRL format?
Sole-proprietors and partnerships are not required to file financial statements with ACRA. Filing of financial statements (PDF / XBRL format) is only applicable to companies. All incorporated companies are required to file their financial statements with ACRA in XBRL format except for those who are exempted.
A full financial statement includes
-
- Cash flow statement
- Statement of financial position
- Statement of profit or loss
- Changes in equity
- Financial notes or comparative information
What is a Partnership?
A business organisation where 2 or more (up to 20) people come together to do business is a partnership. The partners collectively are the business. Partners jointly have ownership of assets. Administrative costs are slightly higher and accounts are slightly more complicated compared to a sole proprietorship. If the partnership wishes to grow bigger than 20 persons, it must incorporate. A partnership exists and continues in law subject to partnership agreement.
Registration can be done by any natural person who is 18 years and above. Foreigners who wish to set up this type of business structure in Singapore would have to appoint a Singapore resident manager who is above 21 years of age. A local Singaporean physical address is required for registration. Registration must be renewed and can be done for a period of one or three years.
For more information on the advantages and disadvantages of a partnership, please click on ‘Tips’.
What is a Limited Liability Partnership?
A Limited Liability Partnership (LLP) company is a business organisation that combines the best aspects of partnerships and companies. This is also a popular business structure in Singapore due to its flexibility and scalability. Shareholders can be corporate entities, individuals, or both. This type of business organisation has at least 2 partners to an unlimited number of people.
For more information on the advantages and disadvantages of a limited liability partnership, please click on ‘Tips’.
What is a company and what are the different types of companies?
A company is a business form of one or more people doing business under a separate “name” (a separate legal entity) and the different types of companies include being private or public.
The persons who own the company are called ‘shareholders’ or ‘members’, but the director(s) are the persons who do the actual running of the company. Companies may be small, medium or large businesses. However, administrative costs are high as the law requires certain minimum accounts to be kept. A company is usually run by a board of directors, of which the director(s) may or may not be a member of the company. Requirement to fulfill for directors in a company is that the director(s) has to have a minimum age of 18 years old and the company must at least have one director who is a Singapore Citizen.
For more information on company and the different types of companies, please click on ‘Tips’.
What is a Private Limited Company?
A Private Limited Company is a company that is set up directly and operates as a separate legal entity to its directors and shareholders, which means that the company is an ‘individual’ in its own right. A Private Limited is the most flexible and scalable company structure in the country. For such a legal entity, the shareholders could either be corporate entities, individuals or both.
A Private Limited Company is limited to a maximum of 50 shareholders, or 20 shareholders for private exempt companies. Shareholders are allowed to be foreigners as 100% foreign ownership is allowed. Shareholders may either be natural persons, corporate entities or a mixture of both. This setup is one that is limited in liability, with their shareholder’s liability being limited to the shares they put into the business. This means that all the business assets, liabilities and profits belong to the company itself and the shareholders are not wholly responsible for debts incurred by the company.
Directors of a Private Limited company are regarded as employees of the company, and in the event of a legal disagreement or debt problems, the Private Limited company is sued or pursued rather than the directors. That is the true beauty of the definition of a separate legal entity. In contrast to a sole proprietor, who is personally liable for any unpaid debts or legal fees originating from a dispute or insolvency, if the company fails, the director’s personal assets, such as the family home or savings, are not at risk.
A Private Limited Company does not publicly trade shares, are allowed to own property in the company’s name and it can also sue or be sued in the company’s name. Additionally, a Private Limited company is typically seen as a more professional operation as compared to an incorporated sole proprietor due to the transparent nature of the business accounts which needs to be made public, alongside with the details of the directors and persons of significant influence.
Most Private Limited companies are small as there is no minimum capital requirement to incorporate a limited company aside from the issuing of at least one share at $1. The accounts that are filed with accountancy firms are also usually modified accounts. A Private Limited has to pay a corporate tax at the rate of 17 percent. There are two partial exemptions available from the assessment year 2020 and onwards.
Private Limited companies would be able to get capital funding from banks and financial institutions easier than sole proprietorships. This makes it easier to attract investors as well. This business structure also needs to appoint a Company Secretary and has to submit annual returns to ACRA.
The Private Limited Companies can also register its ownership over the properties it acquired by virtue of sale or any other modes of acquisition under its own name. It can also participate in legal and litigation proceedings. This means that a Private Limited Company can sue and be sued in courts of law, for purposes of prosecuting a claim for its name against third persons or defending against a claim filed against it by such parties. Lastly, a Private Limited Company still continues notwithstanding a change in the structure of shareholdings or death of any of its shareholders. It still allows for easy transfer of shares even if there are deaths or change in stockholders.
For more information on the advantages of setting up a Private Limited Company, please click on ‘Tips’.
How to incorporate a Private Limited Company and what are the restrictions?
There is no restriction in 100 percent local or foreign ownership of a limited liability company. A local Pte. Ltd. can be fully owned by a foreign shareholder.
The registration of a Private Limited Company is usually done with the Accounting and Corporate Regulatory Authority in Singapore (ACRA). Under normal circumstances, the company incorporation can be done in the shortest time possible (within a day) and the pricing is generally very competitive. The requirements for this corporate set up are as follows:
- At least one resident director who must be ordinarily resident of Singapore. The director must then be an individual who is a Citizen or a Permanent Resident of Singapore or one who has secured an Employment Pass Entrepreneur Pass and is currently residing in Singapore, at least 18 years of age, and not declared by virtue of court order to be a bankrupt or previously convicted of a crime.
- If a foreigner wishes to act as a local director of the company, he can apply for an EntrePass from the Ministry of Manpower
- Undischarged bankrupts cannot be a director and cannot manage a company without approval from the Court or the Official Assignee
- The shareholders can be either be an individual or a corporate shareholder
- Initial paid up capital must be at least $1. Paid up capital refers to the amount of subscribed shares that is already paid upfront by the company.
- At least one Corporate Secretary of the company who shall be a resident of Singapore. The secretary should satisfy the minimum qualification requirements under the Singapore Companies act regarding accreditation and lack of disqualifications. The company secretary must be appointed within 6 months of incorporation
- The Company requires an office address in Singapore which is not a P.O. Box
- At the time of incorporation, the company will be assigned with a Unique Entity Number (UEN)
- An approved company name which is original and ideal for brand identity. It is forbidden under Singapore’s IP Law to use a corporate name which is undesirable and deceptively or confusingly similar to any existing trademarks or corporate names.
Must appoint an auditor within 3 months after incorporation, unless the company is exempt from audit requirements according to yearly statutory requirements. Annual returns must be filed. Statutory requirements for general meetings, directors, company secretary, share allotments must be complied with.
Which company structure is better for a foreigner?
A Private Limited (Pte Ltd) company would be a recommended choice of structure for foreigners due to its feature of limiting partners’ liabilities, simple registration and favourable tax rates (17%) among other aspects. Business expansion would be easier for the owners and partners of the company as well as the Company are able to allot shares to new shareholders whenever an increase of capital is required. Banks are also more inclined to offer bank loans to the Company with this business structure as it is deemed to be more credible.
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How is XBRL filing useful?
Is it mandatory for Singapore companies to hire a corporate secretary?
Yes, it is mandatory to hire a corporate secretary in Singapore, who is a Singapore resident, to incorporate your business. The appointment has to be done within 6 months of the company’s incorporation. The role is to ensure that the company fulfils all regulatory obligations.
What are the Singapore corporate tax rates?
Companies are taxed at a flat rate of 17% on their chargeable income regardless of whether it is a foreign or local company. However, there are also a lot of exemptions and rebates that are factored in during the computation of Tax Payable. For more details, please refer to IRAS website.
Which accounting software do we use?
With many accounting softwares in the market, we have chosen to work with Xero as we prefer a solution that supports businesses of all sizes. Xero is a cloud based accounting software used by various businesses worldwide.
What are our pricing like?
Please contact us so that we can understand your business better first before providing you with a meaningful quote.
How can accounting services help my business?
Quality accountancy services are essential in giving you insights into the overall financial health of your company. Regardless whether you run an SME or a multinational corporation, accounting helps to facilitate your company’s cash flow and growth for the future. With good management of your cash flow, you would be able to make informed decisions for your business and better identify opportunities for potential growth.
How would outsourcing my accounts to you work?
We will need to have full access to your financial information.
What are the different types of business organisations I can choose from?
Sole proprietorship, Partnerships, Private Limited Company and Company (separate legal entity)
What is a sole proprietorship?
A sole proprietorship is a one person business, typically the owner himself. Many typical businesses start this way. Compliance costs are low and the accounts are simple for this type of business organisation. Only Singaporean citizens, permanent residents or EntrePass holders over 18 years of age are able to register for a sole proprietorship. Foreigners who wish to set up this type of business structure in Singapore would have to appoint a Singapore resident manager who is above 21 years of age. A local Singapore physical address must also be registered.
The business is not a separate legal entity from the owner and hence, the profits are taxed at personal income tax rates. Accounts do not need to be audited and annual filing of returns with ACRA are not needed as well. A renewal can be done through the ACRA Bizfile portal and can opt for a period of one or three years. For this business structure, it exists as long as the owner is alive and desires to continue the business.
For more information on the advantages and disadvantages of a sole proprietorship, please click on ‘Tips’.
What are the responsibilities and duties of a company’s Board of Directors?
A company’s Board of Directors is responsible for the day to day running of the company. Directors have heavy responsibilities, ranging from day-to-day corporate decision-making, hiring of staff, purchasing of assets and inventories, strategising of business models to the preparation and filing of financial accounts, tax returns and other statutory documents such as payment of employee salaries and CPF contributions.
The duties of directors are set out in both the common law and statute. These include the duty to:
- Act in good faith (bona fide) in the company’s interest
- Avoid any conflict of interest
- Use powers for proper purposes
- Act with due honesty, care, skill and diligence
- Prepare and keep proper accounts (s.201 CA)
- Disclose certain information (s.156 CA)
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What are the filing requirements of XBRL?
Group | Companies that file FS that are made public | XBRL Filing Requirements |
1 | SG-incorporated companies that are not covered in Groups 2 to 5 below. |
To file FS in XBRL format, and the extent of XBRL filing varies based on the company’s nature and size of operations: Smaller and non-publicly accountable companies (both terms are defined below): All other companies – To file FS in Full XBRL template. |
2 | SG-incorporated exempt private companies (EPCs) that are insolvent |
To file FS in XBRL format, and the extent of XBRL filing varies based on the company’s nature and size of operations: Smaller and non-publicly accountable companies (both terms are defined below): All other companies – To file FS in Full XBRL template. |
3 | SG-incorporated EPCs that are solvent |
Not required to file FS. If the company opts to voluntarily file, to file FS in either: FS in XBRL format. |
4 | SG-incorporated companies in the business of banking, finance and insurance regulated by MAS | To file FS in: XBRL FSH (Banks) template; or XBRL FSH (Insurance) template; together with PDF copy of the FS authorised by directors. |
5 | SG-incorporated companies preparing FS using accounting standards other than prescribed accounting standards in Singapore or IFRS | To file only PDF copy of the FS authorised by directors. |
6 | SG-incorporated companies limited by guarantee | To file only PDF copy of the FS authorised by directors. |
7 | Foreign companies with SG branches | To file only PDF copy of the FS authorised by directors. |
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What are the filing requirements of XBRL?
Group 1:
i) SG-incorporated companies that are not covered in Groups 2 to 5 below.
ii) To file FS in XBRL format, and the extent of XBRL filing varies based on the company’s nature and size of operations:
Smaller and non-publicly accountable companies (both terms are defined below):
To file FS in Simplified XBRL template, together with PDF copy of FS authorised by directors; and
All other companies – To file FS in Full XBRL template.
Group 2:
i) SG-incorporated exempt private companies (EPCs) that are insolvent.
ii) To file FS in XBRL format, and the extent of XBRL filing varies based on the company’s nature and size of operations:
Smaller and non-publicly accountable companies (both terms are defined below):
To file FS in Simplified XBRL template, together with PDF copy of FS authorised by directors; and
All other companies – To file FS in Full XBRL template.
Group 3:
i) SG-incorporated EPCs that are solvent.
ii) Not required to file FS. If the company opts to voluntarily file, to file FS in either:
PDF copy of the FS authorised by directors; or
FS in XBRL format.
If the company opts to file FS in XBRL format, its extent of XBRL filing will vary based on the same criteria as Groups 1 and 2.
Group 4:
i) SG-incorporated companies in the business of banking, finance and insurance regulated by MAS
ii) To file FS in:
XBRL FSH (Banks) template; or
XBRL FSH (Insurance) template;
together with PDF copy of the FS authorised by directors.
Group 5:
i) SG-incorporated companies preparing FS using accounting standards other than prescribed accounting standards in Singapore or IFRS
ii) To file only PDF copy of the FS authorised by directors.
Group 6:
i) SG-incorporated companies limited by guarantee
ii) To file only PDF copy of the FS authorised by directors.
Group 7:
i) Foreign companies with SG branches
ii) To file only PDF copy of the FS authorised by directors.