Simplified Guidelines for Annual General Meetings and Annual Returns
1. Annual General Meeting (AGM)
An AGM serves as a platform for your company to present its financial statements to its shareholders. This allows shareholders to inquire about the company’s financial health and address any concerns they may have. Holding an AGM is a mandatory requirement for all companies in Singapore. In cases where a company is exempted/ opted out from holding an AGM, details must be provided when filing annual return.
When to hold an AGM?
For companies with financial years ending on or after 31 August 2018:
– Listed companies must convene an AGM within four months after the end of the financial year.
– Non-listed companies must hold an AGM within six months after the end of the financial year.
Exemption of holding AGM
Since 31 August 2018, private companies can be exempted from holding AGMs if they distribute their financial statements to members within five months after the financial year end. However, this exemption is subject to certain conditions:
- A member wishing to request an AGM must notify the company no later than 14 days before the end of the sixth month after the financial year end.
- Directors must convene an AGM within six months after the financial year end if requested by any member. The company may seek approval from the Registrar for an extension to hold the AGM by the deadline.
- Private companies must convene a general meeting to present financial statements if requested by any member or auditor no later than 14 days after the statements are distributed. Directors must then convene the general meeting within 14 days of receiving the request.
- Private dormant relevant companies exempt from preparing financial statements are not required to hold AGMs, provided they adhere to the specified safeguards.
A private company may forgo holding AGMs if all members pass a resolution to do so.
Extension for holding an AGM
Companies can apply for Extensions of Time for holding AGM of up to 60 days. Whereas, the application fee for an EOT is $200.
Failure/ Late in holding AGM
Directors failing to comply with AGM requirements may face prosecution in court, along with potential disqualification or debarment from serving as directors. Additionally, companies failing to hold required AGMs may be subject to composition fines imposed by ACRA. Late lodgment penalties will also apply for each annual return filed late.
2. Annual Return (AR)
All companies incorporated in Singapore are obligated to submit annual returns to ACRA to ensure the accuracy of the company’s information on ACRA’s register. This includes disclosing the date of the Annual General Meeting (AGM) as well as the company’s financial statements if applicable. Failure to file annual returns may result in enforcement action against company officers.
The designated officer of the company, such as a director or company secretary, can submit the annual return via ACRA’s online filing portal BizFile+.
When to file an AR?
For companies with financial years ending on or after 31 August 2018:
– Listed companies must file the annual return within five months after the financial year end.
– Non-listed companies must file the annual return within seven months after the financial year end.
Extension for filing AR
An extension of time to file the annual return is only applicable to companies with financial year ending on or after 31 August 2018. Such companies can request a 60-day extension.
Failure/ Late in filing AR
Timely filing of annual returns is mandatory for all companies. Late filings will incur a penalty of up to $600 per late submission.
ACRA can take legal action against companies and their directors for breaking rules, like declining composition offers or refusing ACRA’s offers. If summoned, ACRA might skip offering composition and send details via registered post for the representative or director to appear in court. During the trial, they can plead guilty or go to trial, facing fines of up to $5,000 per charge if convicted.
Attendance in court is a must, even if they’ve talked to ACRA. Missing court might prompt the hearing to proceed without them or result in a warrant for arrest.
According to Section 155 of the Companies Act, directors with three or more filing-related offences in five years might get disqualified for five years. ACRA disqualifies directors linked to three companies struck off by ACRA within the same period.
ACRA can dissolve companies if they seem inactive or not doing business. Directors tied to three dissolved companies in five years might face disqualification.
Conclusion
In short, Singaporean companies must follow rules for AGMs and ARs to be transparent and meet legal standards. AGMs share financial updates with shareholders, while ARs keep accurate records. Companies must meet deadlines, but exemptions and extensions are possible. Not following rules can lead to fines or director disqualification, enforced by ACRA. Compliance is vital to avoid penalties and stay in good standing.
Disclaimer: This article is for informational purposes only and does not constitute any professional advice. Feel free to contact us to consult with our professional advisors team for personalized advice and guidance.
Sources:https://www.acra.gov.sg/how-to-guides/annual-general-meetings/what-is-an-agm
https://www.acra.gov.sg/how-to-guides/filing-annual-returns-ars/what-is-an-annual-return
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