SimpliReso Ebook - Top 5 Costly Mistakes to Avoid

Top 5 Costly Mistakes you must avoid if you own a company in Singapore or suffer the consequences! Brought to you by SimpliReso www.SimpliReso.com 1

Disclaimer  The information provided in this ebook is created to provide helpful information on the subjects discussed and is accurate at the time of writing. SimpliReso does not accept any liability for errors or omissions in the contents of this ebook.  In no event shall SimpliReso be liable for any special, direct, indirect, consequential or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the contents of this ebook.  SimpliReso reserves the right to make additions, deletions, or modifications to the contents of this ebook at any time without prior notice. Brought to you by SimpliReso www.SimpliReso.com 2

Top 5 Defaults  Failure to hold Annual General Meeting by stipulated deadline that you and your Company should take note and avoid  Failure to lay accounts at Annual General Meeting  Failure to file Annual Returns within stipulated timeline  Failure to notify Registrar on changes in particulars of Company, especially resignation of Directors  Failure to notify Registrar on changes in Company’s registered office address Brought to you by SimpliReso www.SimpliReso.com 3

Top 5 Defaults  Depending on the section(s) breached under the Companies may result in penalties and legal action Act, Cap. 50 , your Company may against you and your Company be liable to a fine not exceeding S$5,000 or S$50,000 and may include every officer of your Company.  Your Company will also be given non-compliant rating and not eligible for Certificate of Compliance. Brought to you by SimpliReso www.SimpliReso.com 4

Failure to hold AGM by  Annual General Meeting is stipulated deadline mandatory shareholders’ meeting. may result in a penalty imposed on your  You, as a Director, are responsible Company, or legal action taken against you as for convening your Company’s a Director Annual General Meeting.  Your Company must hold its Annual General Meeting within 6 months after its financial year end. Brought to you by SimpliReso www.SimpliReso.com 5

Failure to lay accounts at AGM  Your Company must present its financial statements for adoption by shareholders may result in every officer of your Company at the Annual General Meeting. to be liable to fine and/or imprisonment due to the inability to produce the accounts on  Directors are responsible to present: - request by the Registrar  Audited or unaudited financial statements, whichever applicable  Directors’ Report  Auditors’ Report, if applicable  Financial statements shall comply with Accounting Standards and give a true and fair view of the financial position and performance of your Company.  Unless agreed by all shareholders and auditors entitled to receive the Notice of Annual General Meeting, they should receive a copy of these documents at least 14 days before the Annual General Meeting so that they can prepare for the meeting. Brought to you by SimpliReso www.SimpliReso.com 6

Failure to file Annual Returns  All Singapore-incorporated companies within stipulated timeline must file Annual Returns. will result in a penalty imposed on your  If your Company is dormant or Company exempted from audit, it is still required to file Annual Returns. Brought to you by SimpliReso www.SimpliReso.com  Your Company must file its Annual Returns via Bizfile portal within 7 months after its financial year end.  Your Company is required to file financial statements in XBRL format for its Annual Returns submission, unless it is a solvent exempt private company.  Subject to fulfilment of requirements, your Company may file simplified Annual Returns via ACRA On The Go mobile app or Bizfile portal. 7

Failure to file changes in  Your Company’s statutory records particulars of Company must be properly updated and maintained. will implicate both your Company and yourself as a Director being liable to a fine  Your Company must promptly and default penalty notify the Registrar on the appointment, cessation (including Brought to you by SimpliReso www.SimpliReso.com disqualifications) and any change in particulars of your Company’s officers i.e. director, chief executive officer, secretary and auditor.  Change in particulars include change of name, nationality, identification, residential address and alternate address.  Notification to the Registrar must be within 14 days after date of appointment, cessation or change. 8

Failure to file change of  Registered office of your Company Company’s registered office must be an address in Singapore to address which all communications and notices can be addressed and will result in a fine and default penalty and where your Company can be cause disruption in contacting your Company contacted.  A P.O. Box cannot be used as your Company’s registered office address. Brought to you by SimpliReso www.SimpliReso.com  Your Company must report the change in registered office address within 14 days after date of change and provide the new address. 9

Conclusion  To avoid these top 5 costly mistakes, make sure you is for you to know enough so that you do not make the same mistakes like the others  Comply with statutory requirements with stipulated timelines  Do not ignore reminder notices sent to alert you or your Company in relation to holding of Annual General Meeting and filing of Annual Returns  Act promptly to avoid unnecessary penalties and legal actions against you Brought to you by SimpliReso www.SimpliReso.com 10

Bonus Section  Appointment of Disqualified Directors sets out other common costly statutory offences which you should also take note  Providing False or Misleading Statement Brought to you by SimpliReso www.SimpliReso.com 11

Appointment of Disqualified  Disqualified directors shall not be Directors eligible to act as a director, unless with permission of High Court or has a negative impact on your Company Official Assignee, whichever is applicable.  Your Company must remove or replace a disqualified director upon notification of the disqualification.  If your Company does not remove or replace the disqualified director, his/her disqualified status will be displayed in your Company’s business profile. Brought to you by SimpliReso www.SimpliReso.com 12

Appointment of Disqualified  Disqualification might arise due to Directors the following: - may result in fine not exceeding S$10,000 or  Person being adjudged imprisonment of term not exceeding 2 years bankrupt or both for the disqualified individual  Person being convicted of any Brought to you by SimpliReso www.SimpliReso.com offence involving fraud or dishonesty punishable with imprisonment for 3 months or more  Person being convicted of 3 or more offences involving persistent default in delivery of documents to Registrar  Person who has 3 or more companies that were struck off by ACRA within a 5-year period 13

Providing false or misleading  You, as a director of your statement Company, must ensure that statement made in any return, may result in fine not exceeding S$50,000 or report, certificate, balance sheet, imprisonment of term not exceeding 2 years financial statements, or other or both document must not be false or misleading in any material aspect.  Lodgement or submission of any document to the Registrar, knowing that it is false or misleading in any material aspect, is a breach of Companies Act. Brought to you by SimpliReso www.SimpliReso.com 14

Avoid the Costly Mistakes at all costs or suffer the consequences! Brought to you by SimpliReso www.SimpliReso.com 15