The definition of a dormant company varies between the Inland Revenue Authority of Singapore (IRAS) and the Accounting and Corporate Regulatory Authority of Singapore (ACRA). The definitions are spelt out in this article:
Here is a video about dormant companies on our YouTube channel:
We will break up the obligations and exemptions for dormant companies into two categories, those under IRAS and those under ACRA.
IRAS obligations and exemptions:
A dormant company must still file its corporate tax return under Form C-S/C for dormant company. The company may apply for a waiver of the dormant company’s obligation to file its corporate tax returns if these conditions are satisfied:
- The company has submitted its Form C or Form C-S up to the date of cessation of business
- The company does not own any investments or does not derive any income from its investments
- (If applicable) The company has de-registered for Goods and Services Tax (GST) before the waiver application
- The company must not have the intention to recommence business activity in the next two years
The application can be done by an officer of the company using IRAS’s myTax Portal or by submitting the Application for Waiver of Income Tax Return (Form C-S/C) Submission by a Dormant Company form physically to IRAS. The outcome will be sent to the company’s registered address within two months for online applications and within three months for hardcopy applications. Once a company has been granted a waiver, the company will not need to submit a yearly application form to IRAS and the waiver will cease once the company recommences business.
ACRA obligations and exemptions:
A dormant company is not required to undergo statutory audits.
The following types of companies will need to prepare financial statements:
- A listed company
- A subsidiary of a dormant listed company
- An unlisted company that does not pass the substantial assets test (Mentioned below)
The company may also choose not to prepare financial statements if:
- The total assets of the company at any time within the previous financial year does not exceed SGD$500,000 (substantial assets test)
- The company has been dormant since incorporation or since the end of the previous financial year
- The company directors have lodged a declaration with ACRA stating that the company has been dormant for the relevant period
The directors’ declaration should state that:
- The company has been dormant since its incorporation or since the end of the previous financial year
- No notice has been received by the company under section 201A(3) of the Companies Act. Section 201A(3) states: A relevant person may by notice in writing require the directors of a dormant relevant company to comply with any or all of the requirements of section 201 in respect of a financial year but the notice in writing must be issued to the directors not less than 3 months before the end of the financial year.
- The company’s accounting records are kept in accordance with section 199 of the Companies Act. Section 199 states:
Accounting records and systems of control
199.—(1) Every company shall cause to be kept such accounting and other records as will sufficiently explain the transactions and financial position of the company and enable true and fair financial statements and any documents required to be attached thereto to be prepared from time to time, and shall cause those records to be kept in such manner as to enable them to be conveniently and properly audited.
(2A) Every public company and every subsidiary company of a public company shall devise and maintain a system of internal accounting controls sufficient to provide a reasonable assurance that —
(a) assets are safeguarded against loss from unauthorised use or disposition; and
(b) transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.
(3) The records referred to in subsection (1) shall be kept at the registered office of the company or at such other place as the directors think fit and shall at all times be open to inspection by the directors.
(4) If accounting and other records are kept by the company at a place outside Singapore there shall be sent to and kept at a place in Singapore and be at all times open to inspection by the directors such statements and returns with respect to the business dealt with in the records so kept as will enable to be prepared true and fair financial statements and any documents required to be attached thereto.
(5) The Court may in any particular case order that the accounting and other records of a company be open to inspection by a public accountant acting for a director, but only upon an undertaking in writing given to the Court that information acquired by the public accountant during his inspection shall not be disclosed by him except to that director.
(6) If default is made in complying with this section, the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months and also to a default penalty.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Singapore Secretary Services
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Here is a video explaining the filing requirements of a company:
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