The preparation of the annual financial statements, the holding of Annual General Meetings (AGMs) and the filing of the Annual Returns (ARs) are important statutory requirements which locally-incorporated companies need to comply with.
The AGM is a meeting where shareholders are informed of the financial status of the company in the last financial year and given an opportunity to engage with the directors of the company. Prompt filing of the financial statements and the AR enables interested stakeholders to obtain up-to-date information on the company and its financial state of health. The timely and accurate disclosure of such information by companies also ensures that corporate data of registered entities in ACRA’s register is up-to-date and accurate.
In 2010, the colour-coded compliance rating and Certificate of Compliance were introduced to recognise companies for good compliance with statutory requirements.
Companies which were compliant with section 175, section 197 and section 201 of the Companies Act received a positive compliance rating (in the form of a green tick which made them eligible for a Certificate of Compliance. Those which were non-compliant were given a negative rating (in the form of a red cross ).
The three sections of the Companies Act as mentioned above are:
- Section 175(1) – A company must hold its AGM every calendar year and not more than 15 months from the previous AGM. If a company is newly incorporated, it has to hold its AGM within 18 months from its date of incorporation
- Section 197(1)(b) – After the company has held its AGM, it has to file the AR within 30 days online via BizFile+
- Section 201(1) - For private limited companies, the accounts that are laid at the AGM must not be more than 6 months old. For public-listed companies, the financial statements laid at the AGM must not be more than 4 months old.
The compliance rating record for all locally-incorporated companies were available for inspection by the public via ACRA’s free online Directory of Registered Entities.
Cessation of colour-coded compliance rating and certificate of compliance
On 31 August 2018, legislative changes relating to AGMs and ARs timelines were introduced via the Companies (Amendment) Act 2017, for companies with Financial Year End (“FYE”) ending on or after 31 August 2018:
- Align the timelines for holding AGMs and filing annual returns with the FYE;
- Exempt all private companies from holding AGMs subject to specified safeguards.
As companies may no longer hold AGMs and therefore do not need to lay financial statements if they meet specified requirements, the colour coded compliance rating that recognises compliance with section 175, 197 and 201 of the Companies Act and the accompanying certificate of compliance are therefore no longer applicable with effect from 31 Aug 2018.
Companies’ compliance with Section 197 (filing of AR) will still be publicly displayed on ACRA’s free online Directory of Registered Entities. Members of the public seeking information on the compliance record of locally-incorporated companies can do so via ACRA’s free online Directory of Registered Entities. The following information will be displayed:
- the date on which the company’s Annual Return was last filed
- the financial year which the said Annual Return was filed
- the date on which the Annual General Meeting was held, if applicable
The search results will also indicate if the company has dispensed with or is exempted from the holding of AGM.
Frequently Asked Questions
Q: How do I know if the company is compliant?
A: It can be determined via a search on the directory of registered entities. You can know when and which is the latest financial statements filed by the company and the date of the last AGM held, if applicable.
Q: Where can I get filing information on the company?
A: You can get information on the Annual Return and Annual General Meeting by conducting a search on the company using the directory search of registered entities. For detailed information, you can purchase the business profile of the company concerned via www.bizfile.gov.sg
Q: Can I still use the certificate of compliance to show that I am compliant and fulfilled all requirements of the law?
A: The certificate of compliance is valid only for the financial year that the company is compliant as indicated in the certificate.
Q: Can I still inform others that my company is awarded a “green tick”?
A: With effect from 31 August 2018, the compliance status of a company will not make reference to the color-coded compliance rating. A certificate of compliance issued before 31 August 2018, is valid only for the financial year that the company is compliant as indicated in the certificate.