All locally-incorporated companies in Singapore are required to hold their Annual General Meeting (AGM) and file their Annual Returns under S175, S197 and S201 of the Companies Act. At the AGM, directors shall present a true and fair view of the company’s accounts to their shareholders.
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. The Annual Return must be filed with the Registrar within one month after the AGM.
If the company/director breaches this statutory obligations, the relevant composition sum and late lodgement fee per breach are as follows:
1) The AGM is held late -$300
2) Financial statements laid at AGM are more than 6 months old for non-listed Company or more than 4 months old for listed Company -$300
3) The AR is lodged late – $300
In 2016, ACRA had introduced a new enforcement power whereby a director who has at least 3 of his companies struck off within a period of 5 years will be disqualified from acting as director, or to take part in the management of any company for a period of 5 years commencing after the date on which the third company is struck off. For the avoidance of doubt, the striking off of the three companies relates only to striking off initiated by the Registrar and does not include voluntary applications for striking off.
In addition, ACRA had also introduced a new enforcement power whereby a director or company secretary who is in default of a relevant requirement in the Companies Act for a continuous period of 3 months or more may face a debarment order from the Registrar preventing him from taking on new appointments as director or company secretary of other companies.
Therefore, it is extremely important for both the company and its directors to ensure that the company’s AGM are held and to lodge the AR within the stipulated timeframe to avoid ACRA taking future enforcement action against the company or its directors.