All VCCs are required to file their annual returns on time. There is a late lodgement fee of $300 imposed against the VCC for annual returns filed within 3 months after the deadline; or $600 for annual returns filed more than 3 months after the deadline.
ACRA may prosecute the VCCs and/or directors that breach statutory obligation in court if:
- VCCs and/or directors do not accept the offer of composition; or
- when composition is not offered.
ACRA may also not offer composition after a summons is issued. ACRA will serve the summons to the VCC’s registered office address and/or director’s residential address by registered post. The summons will indicate the date, time and which Court the VCC’s representative or director has to appear before.
The VCC’s representative or director must attend court even if a representation has been made to ACRA. If the VCC 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 to decide whether the VCC is guilty of the charges. If the director fails to attend court, a warrant for his arrest will be issued by the court.
In court, the VCC’s representative or director can decide whether to plead guilty or claim trial to the charges. If the director and/or the VCC are convicted by the court, they may be fined up to a maximum of $5,000 per charge.
Disqualification of directors for filing breaches
A director who is convicted of three or more filing related offences under the Variable Capital Companies Act within a period of five years will be disqualified as a director, under S155 of the Companies Act which applies in relation to a VCC as they apply in relation to a company. Once disqualified, an individual will not be allowed to be a VCC director or take part in the management of any local or foreign company for five years, effective from the date of the conviction. A disqualified director cannot take on any new appointment as a director or be in any way directly or indirectly concerned or take part in the management of a company. ACRA will also disqualify a director with at least three companies struck off by ACRA within a period of five years.