ACRA’s online Business Directory Search has been enhanced to include a colour-coded compliance rating for locally incorporated companies to denote whether a company is in compliance with the Annual General Meeting (AGM) - including the tabling of up-to-date financial statements - and Annual Returns (AR) requirements.
Compliant companies will be given a green tick and conferred a Certificate of Compliance, while non-compliant ones will have a red cross rating. [View mock-up screenshots]
What does the rating denotes?
||Annual General Meeting, Annual Return and Accounts Up-to-date|
||Annual General Meeting, Annual Return or Accounts Late|
||Not Applicable / Company Status is not “Live”|
The compliance rating for the company will change once the company breaches any of the provisions under section 175, 197 or 201 of the Companies Act (Cap. 50) or the company’s status has changed.
What is the purpose of providing colour-coded compliance rating?
The rating immediately tells the reader whether a company is up-to-date with the holding of its AGM with up-to-date financial statements and filing of its AR.
As an added service, with the ratings, ACRA will also provide the date by which the company must hold its next AGM to table up-to-date financial statements to be in compliance.
Why is the colour-coded compliance rating introduced?
- To provide recognition to companies that are in compliance and to enable them to use their good track record for brand equity purposes – prompt disclosure and good compliance translate to good corporate governance.
- To serve as an incentive for those not in compliance to strive to do better and be on time in their next AGM and annual filing.
- To provide for better transparency to the relevant companies’ stakeholders such as shareholders, creditors, financial institutions by publicising the filing records of the company. This could also assist them in making better informed decisions when dealing with the company concerned.
What are the factors that ACRA considers in assessing the compliance of a company?
The factors for assessing the compliance are based on 3 statutory requirements (under the Companies Act) namely the (1) timely holding of AGM, (2) laying of up to date financial statements at AGM and (3) timely filing of AR.
The specific requirement which is not in compliance will be highlighted in red. For example, if the AGM was held late, the date of the last AGM will be reflected in red.
Please note that the non-imposition of fines or penalties is not an indication of compliance.
Why is the rating on AGM and filing of AR important?
Holding of AGM is important as it is the platform in which members / shareholders can gauge the management‘s performance, review the financials and appoint management team for the next financial year. Through this rating, stakeholders will also be put on notice and spur them to do more due diligence checks in appropriate cases. Prompt AR filing ensures disclosure of company’s performance to stakeholders.
How is the compliance status tracked?
Tracking of compliance status is based on real-time information, at the point of request. The status is updated within 1 hour of filing of the AR.
What are the types of entities involved in the compliance rating?
“Live” locally incorporated companies are involved in the rating exercise. Thus, entities under the categories listed below are not involved. Their compliance status will be indicated as a “-“ :
- Limited Partnerships
- Limited Liability Partnerships
- Business Entities ie sole-proprietors and partnerships
- Foreign Companies
- Public Accounting Firms
Local companies with the following statuses listed below will not be given a compliance rating. Their compliance rating will be displayed as a " - ":
- Companies In The Process Of Being Struck Off
- Struck Off
- In Liquidation - Members' Voluntary Winding Up
- In Liquidation - Creditors' Voluntary Winding Up
- In Liquidation - Compulsory Winding Up (Insolvency)
- In Liquidation - Compulsory Winding Up
- Dissolved - Members' Voluntary Winding Up
- Dissolved - Creditors' Voluntary Winding Up
- Dissolved - Compulsory Winding Up (Insolvency)
- Dissolved - Compulsory Winding Up
- Dissolved - Pursuant To Section 212(1)(D) Of The Companies Act
- Converted To LLP
The compliance rating for Company X was last week. Why is it now?
The system is continuously tracking the compliance status of companies. At the time of accessing the information, if the company is in breach of any of the provisions under section 175, 197 or 201 of the Companies Act, Cap. 50 or the company’s status has changed, the colour coding will change accordingly to reflect the correct compliance status of the company.
For example, as at 20 August 2009, ABC Company Private Limited is due to hold its AGM by 25 August 2009 and to lay its financial statements made up to 30 June 2009. The company is still in compliance and the rating is .
However, if a check is made on ABC Company Private Limited on 27 September 2009 and if the company then held its AGM on 24 August 2009 but has not filed its AR by then, the company would have breached the provision under section 197 of the Companies Act and the company’s compliance rating is a .
If the compliance rating for my company is now , what can I do to bring the compliance rating to ?
The director(s) of the company should ensure that the company complies with the following requirements:
- to hold its AGM once in every calendar year and not more than 15 months after the last preceding AGM (section 175). For a new company, the period is 18 months after date of incorporation.
- to lay before the members / shareholders the financial statements that is not more than 6 months old at the date of the meeting (section 201). For a public listed company the financial statements must not be more than 4 months old at the date of the meeting.
- to file its AR within 1 month from the date of the AGM (section 197).
For example, ABC Company Private Limited only held its AGM on 1 September 2009 when the AGM was due on 25 August 2009 (section 175). Even though the company may have presented an up-to-date financial statements at the AGM and filed the AR on time, the company had in fact breached section 175 of the Companies Act and its compliance rating is a .
In order to achieve a compliance rating of , the company must hold its AGM on or before the next due date, present an up-to-date financial statements at the AGM and file the AR within one month after holding its AGM in the following year.
Is there any impact if I change my company’s financial year end after the last annual filing?
The compliance rating is based on 3 statutory requirements (under the Companies Act) namely the (1) timely holding of AGM, (2) laying of up to date financial statements at AGM and (3) timely filing of AR. Any changes made to the company’s financial year end may affect the due date for holding the next AGM (section 175) and laying of up to date financial statements at the AGM (section 201).
If my company has applied for an extension of time under section 175 and/or section 201, will the compliance rating take into account the extended period granted?
Yes, the compliance rating will take into account the extended period of time for compliance granted under the respective applications.
What happens to my company’s compliance rating after I have filed for a Notice of Error for errors made during my last annual filing?
After the Notice of Error has been lodged and the information has been updated in the records, the compliance rating will be re-computed based on the latest information filed.
What is the impact if my company obtains listing on the Singapore Stock Exchange or is delisted after the last annual filing?
The due date for company to hold its next AGM is calculated based on the company type in the last Annual Return lodged. If the company type has changed, e.g. company has obtained public listing, or is delisted on Singapore Stock Exchange, this information will only be notified to ACRA through the next annual filing, therefore the AGM due date will not be updated until the next annual filing.
My company has filed the Annual Returns in full XBRL format within the prescribed period under section 197 of the Companies Act, for AGM which was held within 1 month after the prescribed period under section 175 and/or section 201 of the Companies Act. Why is my company's compliance status ?
If your company had filed / is filing the AR in full XBRL format (i.e. Option A) within the prescribed period under section 197 of the Companies Act, for AGM which was held within 1 month after the prescribed period under section 175 and/or section 201 of the Companies Act, it may still receive a as its compliance rating. Similarly, if your company had held the AGM within the prescribed period under section 175 and section 201 of the Companies Act but filed its AR in full XBRL format (i.e. Option A) within 1 month after the prescribed period under section 197 of the Companies Act, it may also receive a as its compliance rating.
This is because the compliance rating is based on the company’s compliance with the 3 requirements mentioned above. With the implementation of filing the AR in XBRL format, ACRA has decided to waive the penalties based on the criteria as indicated in Practice Direction No. 3 of 2008.
As the non-imposition of fines or penalties is not an indication of compliance, the company’s compliance status will show a if it fails to comply with any of the 3 requirements as mentioned. For more information, please visit our Compliance section at ACRA website.
For enquiries, you may call our Helpdesk at 6248 6028 or use our interactive web service, Ask ACRA.