Late Lodgement Fee for the Late Filing of Annual Return (AR)
Companies are required to file their annual returns under s197 of the Companies Act (CA). When the annual return is filed after the due date, a late filing penalty has to be paid at the point of AR filing.
Requirements | Type of Breach | Type of Penalty | Imposed against | Penalty |
Section 197 | The AR is lodged late | Late lodgement fee for the late filing of AR | Company | $300 (Second Schedule of Companies Act) (Fees and Late Lodgement Penalties Regulations 2015) |
Example
ABC Company Private Limited’s Financial Year End (FYE) is 31 Dec 2019. It has held its Annual General Meeting (AGM) on 29 Jun 2020 and lodged its AR on 20 Aug 2020. The company has breached section 197 of the CA. The penalty imposed is as follows:
Requirements | Due Date | AR Lodgement Date | Penalty |
Section 197 | 31 Jul 2020 (FYE + 7 months) | 20 Aug 2020 | $300 |
Applicable for FYE on or after 31 Aug 2018
Composition Sum
If the AR is not filed after the due date, ACRA may commence enforcement actions and offer composition, in lieu of prosecution, to companies and/or directors that breach statutory obligations. The composition sums are as follows:
Requirements | Type of Breach | Type of Penalty | Penalty |
Section 175 | The AGM is held late | Composition | A minimum composition sum of $500 |
Section 197 | The AR is lodged late | Composition | A minimum composition sum of $500 |
Example
XYZ Company Private Limited’s FYE is 31 Dec 2019. It has held its AGM on 1 Aug 2020 and lodged its AR on 30 Aug 2020. The company has breached section 175 of the CA and section 197 of the CA. ACRA may offer composition as follows:
Requirements | Due Date | AGM Date/Lodgement Date | Penalty |
Section 175 | 30 Jun 2020 (FYE + 6 months) | 1 Aug 2020 | A minimum composition sum of $500 |
Section 197 | 31 Jul 2020 (FYE + 7 months) | 30 Aug 2020 | A minimum composition sum of $500 |
Applicable for FYE on or after 31 Aug 2018
Court Prosecution
ACRA may prosecute the companies and/or directors that breach statutory obligation in court if:
- Companies and/or directors do not accept the offer of composition; or
- When ACRA decides not to offer composition for the breaches.
ACRA will serve the summons to the company’s registered office address and/or director’s residential address by registered post. The summons will state the date, time and which Court the director or the company’s representative has to appear before. In court, the director or the company’s representative can decide whether to compound (if ACRA offers composition after summons is issued), plead guilty or claim trial to the charges. If the director and/or the company are convicted by the court, they may be fined up to a maximum of $5,000 per charge.
The director or company’s representative must attend court even if a representations/appeal has been made to ACRA. If the director fails to attend court for the summons issued against him, a warrant for his arrest will be issued by the court. If the company fails to send a representative (with a letter of authority) to attend court, the court may proceed to fix the matter for an ex parte hearing (where the court may hear and determine the complaint in the absence of the company representative) to decide whether the company is guilty of the charges.
