What happens if I am late for my AGM or Annual Returns?

What happens if I am late for my AGM or Annual Returns?

If you are unable to hold your AGM or lodge your Annual Return on time, penalties will be imposed in accordance to the Companies Act.

As a recap, there are 3 sections governing the AGM and AR filing requirements for private companies:

Section 175 – Annual General Meeting (AGM)
A company is required to hold its first AGM within 18 months after its incorporation. Subsequent AGMs must be held every calendar year and the interval between AGMs should not be more than 15 months.

Section 197 – Filing Annual Return
The Annual Return must be filed with the Registrar within one month after the AGM.

Section 201 – Audited / Unaudited Accounts
Accounts presented at the AGM shall be made up to a date not more than 6 months before the AGM.

Previous Regime – Penalties are dependent on how late is the filing
Prior to 1 Dec 2015, default of each section will incur a penalty / composition sum of between $60 – $350 depending on the length of default. This method of computing the penalty amount has since been superceded by a flat penalty / composition sum of $300 for each section that is breached.

Penalty Table
The following table illustrates the penalty levied in accordance to the duration of non-compliance for each section:

Offence Penalty Incurred
Did Not File Annual Return Within One Month of AGM Date (S197) Late Filing Fee of $300
Did Not Hold AGM on Time (S175) Composition Sum of $300
Accounts Presented at AGM is more than 6 months old when AGM is held (S201) (For FYE before 31 Aug 2018) Composition Sum of $300

 

Stepped Up Enforcement Actions:
There are 3 levels of enforcement actions that can be taken by the authority. Please note that Stepped Up Enforcement Actions will result in additional composition sums to be paid and are ON TOP of the sums incurred based on the penalty table illustrated as above.

For the avoidance of doubt, ACRA has the discretion NOT to offer any offer of Compostion to the Directors and the Company.

Prior to Issuance of Summons: ACRA will contact the Directors and the Company to provide an offer of composition amounting to $300 for each breach of S175 and S197 (Total $600 for both breaches).

Issuance of Summons: ACRA will issue a Summons for the Directors and the Company to answer to the breaches of S175 and S197 and provide an offer of composition amounting to $600 for each breach of S175 and S197. The Directors, if failing to pay the offer of composition on time, may be required (mandatory) to attend court to receive the official fine to be paid after the court session.(Total $1,200 for both breaches)

Warrant of Arrest:This will be issued if the Directors did not attend the Court Session to answer to the said charges. An offer of composition amounting to $900 for each breach of S175 and S197 will be offered. If no amount is paid to the authority, the directors will be arrested. (Total $1,800 for both breaches)

Commencing 2016, any directors who have at least 3 companies that are struck off by ACRA (Registrar initiated strike off) within a period of 5 years will be disqualified from acting as a director or taking part in the management of any company for a period of 5 years, commencing from the date where the 3rd company is struck off. The strike off count of 3 does not apply towards voluntary strike-off initiated by the Company.

How to Prevent Late Filing:
Remember the following rules and you will generally be safe.

1. Get your Accounts done up on time! This is often the number 1 reason why AGMs cannot be held/deemed held on time!
2. You must hold an AGM at least ONCE every calendar year.
3. Your AGM cannot be more than 6 months from the end of the financial year for which the accounts need to be presented during the AGM.
4. Do not be confused with AGM vs Annual Return. Even if you are exempted from holding a AGM you will still need to lodge the Annual Return.
5. Engage a professional secretarial service provider to help you handle compliance filings if you are busy with business operations.

Option to Extend Filing Due Dates
With valid reasons, you may submit a request to extend your filing deadlines by either one month or two months, provided you have valid reasons to do so.

Please note that government fee of $200 will be applicable for all extension of deadlines. Approval can usually be obtained within 14 days BUT may take up to 1 month if clarification by ACRA is required.