Common penalties for companies in Singapore
5 minute read
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||Late lodgement fee of of S$300|
|The AR is lodged late|
Late lodgement fee of S$300 (for late lodgement filed within 3 months after filing due date)
Late lodgement fee of S$600 (for late lodgement filed more than 3 months after filing due date)
|Late Lodgement Fees (other than late lodgement of annual return)||Ranges between S$50 to S$350 (depending on the number of days late)|
|Late or non-filing of corporate income tax returns||Composition sum of up to $5,000|
Revised Penalty Framework for Annual Lodgements
Starting April 30 2021, ACRA has implemented a new 2-tier penalty framework to encourage voluntary compliance.
Here’s what you need to know:
|Entity type||Late lodgement penalty|
$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)|
|Limited Liability Partnership (LLP)|
Refer to this article for more information on the revised penalty framework.
Late lodgement fees
Businesses have to comply with several statutory obligations under the Companies Act 1967 Some of these requirements stipulate that companies or its board of directors have to lodge notifications with ACRA on changes made in the company such as change of registered business address, appointment or resignation of directors and even change of particulars of an officer.
When a business fails to meet the requirements, ACRA will require companies to pay penalties for late filing. In addition to late filing penalties, any breach of the Companies Act 1967 will result in the company and/or its officers to be guilty of an offense.
ACRA may choose to take enforcement action on offenders and require them to pay a composition fine and/or even imprisonment for serious offenses.
As such, it is important to bear in mind that a composition sum is not identical to a late lodgement fee; both fees can be incurred for one breach. Learn more about composition sums and late lodgement fees against companies and directors for annual return filing breaches.
Additionally, the late lodgement fees payable by your business is also dependent on the number of days in default from your financial year end. You may access further information of the penalty amounts here.
Should your business fail to hold an AGM, miss the deadline to file financial reports, or file changes in the company’s information, 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!