Maybe you have recently registered your business and are all geared up to get your business going. However, a business entity is not immediately ready to start doing business upon formation. Most businesses will have to address operational matters such as work passes, staffing, office space and business permits.
There are also certain tasks that a new company has to complete before it can commence operations. Some of these tasks relate to statutory regulations, such as setting up statutory books, and registering for taxes and licenses. A business entity must also stay compliant with the Accounting and Corporate Regulatory Authority to maintain its legal status.
In this guide, we will discuss some of the things that you need to consider post-incorporation. Here are some requirements for regulations you might not have known that you need to adhere to after you have set up your company.
1. Conduct First Board Meeting
In the early stages of your new company, the directors shall convene the first board meeting or pass the first board resolution relating to the “organisation” of the company which should include administrative matters such as appointing officers and auditors (if needed), confirming address and financial year end, and other internal operational affairs.
2. Adopting Company Seal
The company may have a seal for sealing official documents such as share certificate, contracts and deeds. The Seal shall be kept under the control of the company secretary and must be authorised by the board prior to be used each time. However, the use of company seals is slowly being phased out. As of 2017, a company may execute a deed without a common seal by signature under these conditions:
- On behalf of the company by a director of the company and a secretary of the company;
- On behalf of the company by at least 2 directors of the company; or
- On behalf of the company by a director of the company in the presence of a witness who attests the signature.
3. Issuing Share Certificates
A Share Certificate is a legal document that certifies ownership of a specific number of shares in a corporation. It is mandatory for Singapore companies to issue share certificates to all of its shareholders. These certificates should be issued under the company seal and signed either by two directors, or by one director and the secretary. Share certificates are usually kept by individual shareholders and should be reissued when the shares are transferred, split, consolidated or reclassified.
4. Appointing Company Secretary
Every company must appoint a local company secretary, who is primarily responsible for the administrative and reporting duties required by Singapore laws.The company secretary must therefore have the requisite knowledge and experience to discharge the functions of a company secretary. If there is any change in the particulars of the company secretary, the company must notify the Accounting and Corporate Regulatory Authority (ACRA) within 14 days of the date of change.
5. Appointing Chief Executive Officer (CEO)
A company may appoint a CEO. A CEO is any one or more persons who is principally responsible for the management and conduct of the business of the company. If there is such a person or persons appointed as the CEO or if there is any change in the particulars of the CEO, the company must notify ACRA within 14 days of the date of appointment or change.
6. Registered Address
A company must have a registered office in Singapore which must be open and accessible to the public for a minimum of 3 hours a day during normal office hours on weekdays. If there is any change in the address of the registered office, the company must notify ACRA within 14 days of the date of change.
7. Financial Year End (FYE)
Every company must decide on their Financial Year End (FYE) upon incorporation and it is at the company’s discretion to decide on the FYE. The duration of a company’s financial year cannot be more than 18 months in the year of incorporation.
8. Appointing Auditor (if applicable)
Singapore companies are exempt from appointing an auditor if they are dormant or satisfy two out of the following three conditions for the immediate past 2 consecutive financial years:
- The total annual revenue of the company must not exceed S$10 million
- The total assets of the company for the financial year end must not exceed S$10 million
- The number of full-time employees at the end of the financial year must not exceed 50
9. Setting up Statutory Books
It is mandatory for all companies to maintain statutory books, in particular, register of beneficial owners (termed as registrable controllers) and register of nominee directors. Such statutory books are the legal records of your company which are kept at its registered office in Singapore, and the information therein must be made available to the Authorities and public agencies upon request.
10. Registration of Goods and Services Tax (GST)
All Singapore businesses must register for GST if their annual taxable revenue is more than S$1 million, or currently making taxable supplies and the annual taxable revenue is expected to be more than S$1 million. The business is expected to register for GST within thirty days from the time it is deemed liable.
You may also choose to register for GST voluntarily. Approval of a voluntary registration is at the discretion of the Controller of The Inland Revenue Authority of Singapore (IRAS). Once approved, you must remain registered for at least two years.
11. Registration of Central Provident Fund (CPF)
The Central Provident Fund or CPF is a compulsory pension fund scheme in which the employer and employee contribute a certain percentage of the monthly salary to the fund. CPF contribution by the employer is mandatory for all local employees who are Singapore citizens or permanent residents earning more than S$50 a month. The maximum CPF contribution rate for employer and employee is 14.5% and 20% respectively and can be lower depending on certain factors such as employee age, permanent status, etc. CPF contribution is not required for foreign employees.
It is relatively simple to start a business in Singapore, but all the compliance matters and requirements in running a business might get overwhelming. Leftright Corporate is here to help you with that.