Companies

Q1. How do I know whether my new company name can be approved ?
A1. Bizfile automatically processes the name application and responds with outcome. A name will be rejected if it is identical to the name of another company, LLP or business. Undesirable names, including vulgar names, will also not be allowed.

Q2. Must a company appoint a company secretary?
A2. Section 171 of the Companies Act requires a company to appoint a company secretary. The office of secretary shall not be left vacant for  more than 6 months at any one time. Private limited companies need not appoint a professionally  qualified secretary.However a secretary  must still be appointed. Only public companies must appoint a professionally qualified secretary. Examples of professionally qualified secretaries are lawyers, accountants and chartered secretaries.

Q3. What is paid-up capital?
A3.Paid-up capital refers to the issued capital that is paid up by the shareholders.

Q4. What is issued capital?
A4. Issued capital refers to the share capital which has been allotted to the shareholders

Q5. Must a company appoint a company auditor?
A5. Yes. However, a company which is exempted from audit requirements under the Companies Act is exempted from the requirement to  appoint an auditor of the company.

Q6. If my company has one director and one shareholder left, is it compulsory to amend my M&AA?
A6. The law does not require a company to amend its M&AA in such a case. However, you may wish to examine if your company’s M&AA contains any provisions that are inconsistent with having only one director and shareholder. If you decide to alter your company’s M&AA, you should note the requirements of sections 26, 26A, 33, 34 and 37 of the Companies Act.

Q7. Can my small company be exempt from audit?
A7. An exempt private company is exempt from audit requirements if the starting date of its financial year is between 15 May 2003 and 31 May 2004 and its turnover for that financial year does not exceed $2.5 million. For financial years starting 1 Jun 2004,the amount of the turnover has been raised to $5 million. These companies are still required to maintain proper accounting records.

 

Compliance

Q1. Must my dormant company submit audited accounts?
A1. A company is dormant if it does not have any accounting transactions for that financial year other than the exceptions set out in section  205B(3) of the Companies Act e.g. maintenance ofregistered office. Such a company is not required to have its account audited. It can file unaudited accounts.

Q2. Resignation Matters:I wish to resign as a director of my company. How should I do it?
A2. You may resign as a director of your company as long as there is one locally resident director (i.e. director whose usual place of residence is  in Singapore) remaining in the company after your resignation.Your resignation must also be in accordance with the companys Articles of Association.

Q3. Dormant Companies:My company is no longer in operation. Am I still required to notify ACRA of changes in the company?
A3. Notwithstanding that the company is no longer in operation/ has ceased business activities, it is still required to notify ACRA of changes in the company, e.g. the appointment or cessation of directors, change in the registered office address, allotment of shares, etc.

Q4. Disqualified Directors:I am the sole/ last director of the company. What will happen to the company after I am disqualified??
A4. Even if you are the sole/last director of the company, you are still required to notify ACRA of your disqualification. After your disqualification  is lodged, there will be no directors left in the company. The shareholders must then appoint a new director. If the shareholders do not intend to recommence business in the future, they may consider applying to the Registrar (through the secretary or a professional firm) to strike off the name of the company.

Q5. I am a bankrupt, why am I still being prosecuted/ being issued with a summons?
A5. If the offences were committed before you were declared a bankrupt, you are still liable for the offences.

Q6. For debts that would be time-barred after 7 years, does it mean that a debtor can adopt a “it is no use chasing me, I don’t have any money to pay” stance and with such delaying tactics, avoid paying a debt after 7 years.
A6. Please seek independent legal advice.

Q7. I am providing freelance services.Do I need to register my activity as a business?

A7. Any activity that is carried out on a continuity basis for the purpose of gain is required to be registered with ACRA.

 

Auditing

Q1. Are audit fees regulated and is there a scale for fees?
A1. Audit fees are not regulated by the Public Accountants Board and there is no scale reference for auditors. Auditors generally charge fees according to time spent on the audit assignment. Fees also reflect the level of skill and experience required and the level of responsibility and complexity involved in the audit work. Alternatively, fees are also charged on an agreed amount between the auditor and the client.

Q2. Must my company adhere to certain accounting standards for compliance purposes?
A2. Generally, all companies incorporated in Singapore must follow the Singapore Accounting Standards. However, depending on the nature of the company’s business, not every standard needs to be adhered to.

Q3. My company’s transactions are few or none, is there a need for an annual audit?
A3. Under the Companies Act, except for Exempt Private Companies (EPC) whose annual revenue is less than S$5million and dormant EPCs, all limited companies in Singapore need to be audited annually. However, you may wish to note that audit fees are generally lower for companies that have fewer transactions.

Q4. Does my company require an annual audit ?
A4: Under Singapore Law, if an Exempt Private Company (EPC) satisfies any one of the following criteria, it will be exempted from audit
requirement :

• Revenue not more than S$5 million for the financial year starting on or after 1 June 2004; or
• The company is dormant for the financial year starting on or after 15 May 2003.

However, all companies are required to maintain proper accounting records and prepare “true and fair” financial statements that comply with
the requirement of Financial Reporting Standards (FRS) that are prescribed by the Council on Corporate Disclosure and Governance (CCDG).
Q5. Can I do a review instead of an audit?
A5. Review engagements are becoming more common. Many companies see a review as a cost-effective alternative to an audit.
There is a significant difference between an audit and a review; the level of assurance provided by a review engagement is substantially lower than the level of assurance provided by an audit engagement. The level of assurance provided by a review engagement depends on the amount of work performed by the reviewer, which may not be clear to those seeking to rely on the review. And review engagements are less likely to detect material fraud and error than audit engagements. It is important that companies understand the limitations of review engagements, as compared to a full audit.

 

Personal Tax

Q1. Do I have to file personal income tax?
A1. If you have received any letter, form or SMS informing you to file an Income Tax Return, you must file regardless of the amount of your  annual income in the previous year or whether your employer is participating in the Auto-Inclusion Scheme (AIS) for Employment Income.

Q2. When is the filing due date for personal income tax?
A2. Please submit your completed paper tax form to us by 15 Apr. If you e-File, you have up to 18 Apr to do so.

Q3. Do I have to file personal income tax if working outside Singapore?
A3. Generally, overseas income received in Singapore on or after 1 Jan 2004 is not taxable and does not need to be declared. This includes
overseas income paid into a Singapore bank account.

Q4. Is there any exceptions that overseas income is taxable in Singapore?
A4. Overseas income is taxable in Singapore if…

•  It is received in Singapore through partnerships in Singapore.
• Your overseas employment is incidental to your Singapore employment. That is, as part of your work here, you need to travel overseas.
• You are employed outside Singapore on behalf of Government of Singapore.

Q5. As a foreigner, do I have to pay personal income tax?
“A5. The extent of your tax liability will depend on your tax residency status. If you are issued with a work pass of at least 1 year validity, you will be Your tax residency will be reviewed at the point of tax clearance when you cease your employment based on our tax residency rules. You will be regarded as a non-resident if your stay in Singapore is less than 183 days.” treated as a tax resident upfront. Your tax residency will be reviewed at the point of tax clearance when you cease your employment based on tax residency rules. You will be regarded as a non-resident if your stay in Singapore is less than 183 days.

• As a non-resident and you are in Singapore for 61 to 182 days in a year, your employment income is taxed at 15% or progressive resident rates, whichever results in a higher tax amount; director’s fees and other income are taxed at the prevailing rate of 20% and not entitled to tax reliefs.
• As a non-resident and you are employed for 60 days or less in a year, your short-term employment income is exempt from tax. This rule does not apply if you are a director of a company, a public entertainer or a professional in Singapore. Tax exemption does not apply if your absences from Singapore are incidental to your Singapore employment. In this case, your total income (including income for services rendered outside Singapore) is taxable in full in Singapore.

 

Corporate Tax

Q1. What is ECI?
A1. ECI means Estimated Chargeable Income. It is an estimate of a company’s chargeable income for a Year of Assessment (YA).

Q2. Who needs to file ECI?
A2. All companies have to submit their Estimated Chargeable Income (ECI) within three months from the end of their financial year end.  Even if a company estimates its chargeable income as zero, it still has to file a “Nil” ECI.

Q3. What if I don’t file ECI?
A3. If your company does not submit the ECI within three months from the end of its financial year, IRAS may issue a Notice of Assessment  (NOA) based on our estimation of your company’s income.

Q4. What is Form C/ Form C-S?
A4. The Form C/ Form C-S is a declaration form for a company to declare its income.

Q5. Who needs to file Form C/ Form C-S?
A5. All companies carrying on a trade or business in Singapore need to file Form C annually to report their income. Even if the company is  making losses, it is required to file the Form C.

Q6. Who can sign on the Form C/ Form C-S?

A6. Any person authorised by the company can sign the Form C/ Form C-S. However, the director or principal officer of the company is still responsible for the company’s tax affairs.

Q7. What if I do not file Form C/ Form C-S?
A7. If the company does not file Form C/ Form C-S by the due date, IRAS may issue a Notice of Assessment (NOA) based on an estimation of the company’s income.

Q8. Does a dormant company need to submit the Income Tax Return (Form C/ Form C-S)?
A8. A dormant company must submit its Income Tax Return (Form C/ Form C-S)* unless it has been granted waiver of Income Tax Return (Form C /Form C-S) submission.

 

Good & Services Tax

Q1. Is GST registration compulsory?
A1. You are required to continually assess whether your business needs to be registered for GST compulsorily.
In most cases, registering for GST is compulsory when:

• your taxable turnover for the past 4 quarters* is more than $1 million (unless you are certain that business turnover in the next 12 months
  will not exceed $1 million); or
• you are making or intend to make taxable supplies and you can reasonably expect your taxable turnover in the next 12 months to be more
  than $1 million.

If your situation is either of the above, you need to apply for GST registration within 30 days of the date which your registration liability arises.
If your situation does not fall within both circumstances, you do not need to register for GST. However, you may choose to register for GST on a  voluntary basis.

Q2. How to apply exemption from GST Registration?
A2. If you are required to register for GST and you make or intend to make wholly or mainly zero-rated supplies, you can apply to the Comptroller of GST for exemption from GST registration. Upon approval of exemption, you do not need to collect GST on your sales and file GST returns. However, you will not be able to claim the GST incurred on your business purchases of goods and services.

Q3. Any Issues need to be considered before voluntary registration?
A3. Where it is not a requirement under the law for you to register for GST, you may choose to apply for GST registration on voluntary basis if
you satisfy any of the following:

• You make taxable supplies.
• You make only out-of-scope supplies. Out-of-scope supplies mainly refer to sales of goods which did not enter Singapore and goods in transit.
• You make exempt supplies of financial services that are also international services.

If you carry on a business and intend to make any of the above types of supplies in the course or furtherance of that business, IRAS may also allow you to register voluntarily. However, should your intention fail to materialise and the Comptroller is not satisfied that you have firm intention to make taxable supplies from the start, the input tax you have claimed following your GST registration may be recovered from you.