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Dormant Companies And Their Requirements For Filing Of Annual Returns

The Accounting and Corporate Regulatory Authority of Singapore (ACRA) defines a company as dormant when it does not perform any accounting transactions for a given year.

The ACRA, which is Singapore’s regulator of business entities, further clarifies that the following transactions do not qualify a dormant company into an active one, namely: the appointment of a secretary as well as an auditor; the maintenance of a registered office; the keeping of books and registers; the payment of Registrar fees as well as of any penalty imposed by the ACRA; and the taking of company shares by a subscriber to the memorandum.

Certain rules apply to dormant companies when it comes to auditing of accounts as well as filing of Annual Returns. A dormant company whose financial accounts begin on or following May 15, 2003 is exempted from audit. This audit exemption means that these qualified companies will need to submit unaudited financial accounts. Those who choose to have their accounts audited, however, need to submit the audited accounts along with their auditor’s report.

In certain cases, the ACRA can also require accounts to be audited if it deems there is a breach of the Companies Act, or otherwise for public interest.

Likewise, a dormant company is also required to file its Income Tax Return (Form C) with the Inland Revenue Authority of Singapore (IRAS). In certain cases, however, a dormant company may be given a waiver after submitting the “Application for a Waiver to Submit Income Tax Return (Form C) by a Dormant Company” form.

However dormant, a company still has to file its Annual Return to the ACRA, although they do not need to attach their audit exemption statement. A dormant company, however, will need to complete online declarations which will be reflected in its Annual Return.