The MOF and ACRA is currently inviting public feedback on the review of the Companies Act and the Regulatory Framework for Foreign Entities. One potential recommendation of interest is the introduction of a small company criteria. This will be used to determine whether a company is required to be audited.
As a result of this, small companies will be exempted from audit. In order to qualify for this, 2 of 3 criteria need to be fulfilled, as per follows:-
1) Annual turnover not more than $10 million (currently it is $5 million)
2) Total gross assets not more than $10 million
3) Total employees not more than 50.
If passed, it will be very welcome news for most small companies out there ! Nowadays, many small companies can easily hit an annual turnover of $5 million, though this can be attributed to rising inflation. Sigh !
So, if recommendation is passed, small companies can save valuable time, money and resources which can better used to expand their business. As most small companies are privately held and most banks require collateral for loans anyway, this is definitely a step in the right direction!
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