Common penalties for companies in Singapore

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Now that you have a legal business in Singapore, it is important to operate within the legal boundaries.

According to the Singapore Companies Act, each company must comply with the annual filing requirements to the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS). Avoid penalties and legal repercussions by complying with the regulations.

 

Here is a summary table of common penalties for companies in Singapore:

Type of breach

Penalties amount (SGD)

The AGM is held late Composition sum of $300
The AR is lodged lateLate lodgement fee of $300
Financial statements laid at AGM are more than 6 months old for a non-listed company or more than 4 months old for a listed companyComposition sum of $300

Revised Penalty Framework for Annual Lodgments

Starting April 30 2021, ACRA will implement a new 2-tier penalty framework to encourage voluntary compliance. Here’s what you need to know of the new changes:

 

Entity type

Current late lodgement penalty 

New late lodgement penalty

Local companies

Flat rate of S$300

 

$300 for late lodgement filed within 3 months after filing due date; or

$600 for late lodgement filed more than 3 months after filing due date.

 

Variable Capital Companies (VCC)
Foreign companies

8-tier penalties ranging from $50 to $350

Limited Liability Partnership (LLP)

For more information of the revised penalty framework, click here!

Late lodgement fees

Businesses have to comply with several statutory obligations under the Companies Act, Cap 50. Some of these requirements stipulate that companies or its board of directors have to lodge documents with ACRA on change of registered business address or resignation of directors.

 

When a business fails to meet the requirements, ACRA may take enforcement action and exercise discretion to compound the breach if the offender pays a composition sum.

 

If the breach comes in the form of not filing a statutory required document, the chances are that it will not be possible to pay a composition sum to resolve the issue. If the documents are presented later, a late lodgement fee shall be incurred.

 

Bear in mind that a composition sum is not identical to a late lodgement fee! These two terms have different meanings.

 

To learn more about composition sums and late lodgement fees, take a look here.

Final thoughts

Should your business fail to hold an AGM or miss the deadline to file financial reports, it is at risk of suffering fines, summons, and various other penalties. 

 

At Sleek, our team of experts can help with all of your required filing requirements. This way, you can focus on growing your business while we keep everything compliant.

 

Contact us to begin!

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