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 This method of computing the penalty amount has since been superceded by a flat penalty / composition sum of $300 for each section that is breached.
The following table illustrates the penalty levied in accordance to the duration of non-compliance for each section:
|Did Not File Annual Return Within One Month of AGM Date (S197)||Penalty 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)||Composition Sum of $300|
Please note that the penalties shown above are calculated based on the non-compliance
for each section that you breached. Therefore, if you have breached 2 sections, your
penalty will be calculated based on the length of default for each section.
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. Your subsequent AGM cannot be more than 15 months from your previous AGM / If this is your first AGM, it must be held within 18 months from the date of incorporation of your company.
5. Try to NOT HOLD YOUR AGM as soon as your financial year has passed if you still have sufficient time to hold one a few months down the road. New company directors tend to assume swift filing is a good thing but it is not always the case for AGM and Annual Returns!
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 $50 – $100 will be applicable for all extension of deadlines. The fees are usually dependent on the duration of extension granted.