By staying compliant, the company can maintain a good track record for brand equity, as well as good corporate governance. In addition, the company will be able to avoid penalties, legal repercussions and unnecessary damages to its brand
Singapore (PRWEB) March 06, 2015
Rikvin, a leading professional services company in Singapore, highlights a guide on statutory compliance for Singapore-incorporated companies.
As stated in the Rikvin guide, as the rest of the world begins to embrace the International Financial Reporting Standards (“IFRS”) an international standard promoted by the International Accounting Standards Board (“IASB”), Singapore, a small nation-state whose economy that interacts constantly with the rest of the world, has been gradually adopting the IFRS as well. Thus far, Australia, Canada and the European Union have already adopted the IFRS; and the U.S. has committed to adopting the IFRS over time.
Companies incorporated in Singapore and branches of foreign companies are required to prepare their financial accounts annually in accordance with the Singapore Financial Reporting Standards (“SFRS”). Since 2011, the Accounting and Corporate Regulatory Authority (“ACRA”) has established the Financial Reporting Surveillance Programme (“FRSP”), where a selected pool of financial statements are reviewed to determine if they comply with the SFRS and give a true and fair view of the company’s profit and loss, as well as the state of affairs of the company.
“In situations where ACRA finds that the company’s financial accounts are not up to par, ACRA will hold the directors of the company responsible. Under Section 201 of the Companies Act, directors are obliged to enclose a directors’ report signed by at least two directors to the company’s financial accounts, declaring that the profit or loss of the company reflected are in order; and that the financial accounts have provided a true and fair view of the company’s state of affairs,” explained Mr Satish Bakhda, COO at Rikvin.
“This directors’ report will also be approved by way of a written resolution of the board of directors of the company. As the Companies Act does not distinguish between an executive director and a ‘sleeping’ nominee director, it should be noted that all directors bear this responsibility,” he added.
Moreover, the guide highlights the importance of keeping well informed of the deadlines set out by the Companies Act. For a newly incorporated company, Section 201 of the Companies Act requires directors to present the financial accounts at the annual general meeting (“AGM”) of the company, which should be held within 18 months from the date of incorporation. Thereafter, a company will need to hold its AGM within six months from the financial year end of the company. Under Section 175, a company should hold its AGM within 15 months of the last AGM, within the calendar year.
Other statutory compliance matters covered in the guide include setting of the company’s financial year end, appointment of the company’s auditors and GST registration, among others.
“By staying compliant, the company can maintain a good track record for brand equity, as well as good corporate governance. In addition, the company will be able to avoid penalties, legal repercussions and unnecessary damages to its brand,” Mr Bakhda remarked.
Indeed, the penalties for non-compliance are significant. Section 175(4) provides that if default is made in the holding of an AGM, the company and every officer of the company (including its directors and company secretary) who are in default shall be liable on conviction to a fine not exceeding S$5,000.00 and also to a default penalty.
To learn more about the statutory compliance requirements for Singapore-incorporated companies, please click here.
Established in 1998, Rikvin has partnered with thousands of investors, entrepreneurs and professionals who want to work or do business in Singapore. Rikvin’s areas of expertise include company Singapore company registration, accounting, taxation and other related corporate services. Rikvin is also a licensed employment agency and offers a full spectrum of Singapore work visa services for professionals who wish to relocate to Singapore.
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