If your company has not filed an annual return for more than one fiscal year, you will need to file the overdue annual return before you can continue to file an annual return for the most recent financial year.
ACRA has revised the penalty framework for annual return and simplified it to a secondary2 tier penalty framework that will take effect on April 30, 2021.
Under the revised penalty framework, a late fee of S$300 will be imposed on all companies incorporated in Singapore, VCCs and LLPs if the annual return is submitted within 3 months after the due date, and S$600 if the annual return is submitted more than 3 months after the due date. Please refer to the revised penalty framework as set out in the table below:
Companies that not filing annual return
The Singapore authorities may delist a company if there are reasonable grounds to believe that the company is not carrying on business or is not operating (e.g. has not filing the annual return for a number of consecutive years).
A director will also be disqualified if he or she has been removed from at least three companies by the authorities within a five-year period. Once a person is disqualified, he/she is prohibited from acting as a director of a company or participating in the management of any local or foreign company for a period of 5 years from the date of removal from the third company. A disqualified director may not accept any new appointment as a director or be involved or participate in any way, directly or indirectly, in the management of the company.
For the avoidance of doubt, the delisting of the three companies refers to delisting on the initiative of the registration authority and does not include voluntary applications for delisting.
Disqualification of directors for filing breaches
A director who is convicted of three or more filing related offenses under the Companies Act within a period of five years will be disqualified as a director, under S155 of the Companies Act. Once disqualified, an individual will not be allowed to be a company director or take part in the management of any local or foreign company for five years, effective from the date of the conviction. A disqualified director cannot take on any new appointment as a director, or be in any way directly or indirectly concerned or take part in the management of a company. ACRA will also disqualify a director with at least three companies struck off by ACRA within a period of five years.
ACRA may prosecute the directors in court if:
- they do not accept the offer of composition or
- when composition is not offered.
ACRA may also not offer composition after a summons is issued. ACRA will serve the summons to the director at his residential address by registered post. The summons will indicate the date, time and which Court the director has to appear before. If the director fails to attend court, a warrant for his arrest will be issued by the court. The director must attend court even if he has made representations to ACRA.
In court, the director can decide whether to plead guilty or claim trial to the charges. If the director is convicted by the court, he may be fined up to a maximum of $5,000 per charge.