After a recent review, changes have been made to the Singapore Companies Act 2014, which came into force on July 1st, 2015.
These changes are to ensure that Singapore’s corporate regulatory framework will continue to meet changing business practices, to reduce the compliance and regulatory burden for companies. As well as maintaining a transparent corporate environment and good corporate governance. A compelling number of parties will benefit from these changes.
The amendments will be applied in two phases. The first phase being on July 2015 as the second is expected to be introduced at the beginning of 2016.
Phase One: Amendment highlights
Audit exemption for small companies
Far fewer companies will need to conduct audits and the requirement to have a Corporate Shareholder will no longer create an automatic commitment to perform an audit since a new small company concept will be introduced. Even though audits are very useful and important, they are not always necessary for business owners, resulting in a loss of money and time sometimes. The new criteria for being considered a small company are as follows:
- It is a private company for the financial year in question.
- It meets at least 2 of the 3 following criteria for immediate past two financial years:
- Total annual revenue does not exceed S$10 million.
- Total assets do not exceed S$10 million.
- Number of employees does not exceed 50.
Director’s report no longer needed
Up until July, a Director had to issue a report that would be attached to the financial statements. The Director’s report has been abrogated and the Director’s statement enhanced to include certain forced disclosures that were required under the Director’s report.