Knowledge Highlights 5 January 2021

On 30 December 2020, the Accounting and Corporate Regulatory Authority (“ACRA”) announced the revision of the penalty framework for late annual lodgments with a simplified two-tier penalty, which will take effect from 30 April 2021. This is part of ACRA’s ongoing efforts to make compliance simple and to encourage companies and limited liability partnerships (“LLPs”) to take their statutory obligations on annual reporting seriously. There is no change to the current penalty framework for ad hoc filings.

Revised penalty framework

Under the revised penalty framework, all Singapore-incorporated companies, variable capital companies (“VCCs”) and LLPs will be imposed with a late lodgment penalty of S$300 if the annual return or annual declaration is filed within three months after the filing due date, or S$600 if the lodgment is filed more than three months after the filing due date. The revised penalty framework is set out in the table below.

Entity type

Late lodgment penalty (current)

Late lodgment penalty
(from 30 April 2021)

Local companies

Flat rate of S$300

S$300 for late lodgment filed within 3 months after filing due date; or

S$600 for late lodgment filed more than 3 months after filing due date.

VCCs

Foreign companies

8-tier penalties ranging from S$50 to S$350

LLPs

(Source: ACRA media release on Revised Penalty Framework for Annual Lodgments to take effect from 30 April 2021)

The timely filing of annual lodgment is an important statutory requirement as this will ensure timely public disclosure of key information such as the health and status of the entity. As such, ACRA advises all companies and LLPs to file their annual lodgment on time to avoid incurring the late lodgment penalty.

Update

The following types of entities have annual statutory obligations:

  • Annual returns by local companies under section 197 of the Companies Act
  • Annual filing of financial statements by foreign companies under section 373 of the Companies Act
  • Annual declarations by LLPs under section 24 of the Limited Liability Partnerships Act
  • Annual returns by VCCs under section 97 of the Variable Capital Companies Act 2018

The revised penalty framework is only applicable for late filing of annual lodgments and will not affect other ad hoc filings.

The new penalty framework is only applicable to entities that have filed late, and the amount of penalty payable will be reflected and imposed at the point of online lodgment. If the entities do not voluntarily comply, ACRA may take enforcement actions including offering of a composition sum or prosecuting the companies or LLPs in court. More details are available on the ACRA Annual General Meeting and Annual Return Breaches webpage.

Reference materials

The media release is available on the ACRA website www.acra.gov.sg or by clicking here.

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