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Compliance and Regulations

What Are the ACRA Penalties My Company May Incur?

25 September 2023
Grof Writer
5 Minutes Read
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What is ACRA? 

The Accounting and Corporate Regulatory Authority(ACRA) is undoubtedly a familiar name to all business owners. As part of Singapore’s Ministry of Finance, ACRA is mainly responsible for the registration of new businesses, the diligent monitoring of ongoing businesses, and enforcing proper closure procedures when businesses cease to exist. In addition, ACRA assumes the oversight of financial reporting and plays a facilitative role in supporting the enterprise. Should companies fail to meet the compliance requirements stipulated by the Companies Act, ACRA also has the authority to levy fines and issue court summons to them.  


Want to learn more about the ACRA penalties your company could incur? Whether or not you are an aspiring entrepreneur or a seasoned businessman, read on to discover ways your company can steer clear of committing these offences! 


Common Offences & Penalties 

Beware, fellow business enthusiasts! ACRA does not take company offences lightly. They have a comprehensive list of common offences that can land you in hot water, ranging from hefty fines to even imprisonment, as listed here on their website. To ensure your business sails smoothly through the treacherous waters of compliance, let's dive into some of the common offences and their designated penalties. 


  • Failure of Substantial Shareholder to notify company of their interests: Before the expiration period, a notice will be duly served whether the individual has ceased to be a substantial shareholder or not.   



  • Failure of a company to have a registered office address: Every default officer of the company will be deemed guilty of an offence. Upon conviction, they will be subject to a fine not exceeding $5,000, as well as a default penalty. 



  • Failure to notify the Registrar of any change in the registered office address and accompanying office hours: Punishable with the penalty of paying a composition sum. Any officer of the company who is found to be in default, upon conviction, may face a fine not exceeding $5,000, in addition to a default penalty.

 


  • Failure to publish Company’s Name and Registration Number: Subject to the penalty of fines, which will vary depending on the severity of the offence. 



  • Requirement to have at least one ordinarily resident director in Singapore: Subject to the penalty of fines, which will vary depending on the severity of the offence. 



  • Disqualification to act as director of company due to bankruptcy: If found guilty, an individual may be subject to the responsibility of paying a fine of up to $10,000, imprisonment for a maximum period of 2 years, or both. 



  • Disqualification to act as director upon conviction for certain offences: Any offence (whether in Singapore or elsewhere) involving fraud or dishonesty is punishable with an imprisonment of 3 months or more. 



  • Disqualification to act as director for persistent default in relation to delivery of documents to Registrar: If found guilty, an individual may be liable to a fine not exceeding $10,000, imprisonment for a maximum period of 2 years, or both. 



  • Failure to notify the Registrar of changes in the Register of directors, managers, secretaries and auditors: Every default officer of the company will individually be guilty of an offence and liable to a fine not exceeding $5,000, as well as a default penalty. 



  • Failure to hold the Annual General Meeting within the stipulated timeframe: If found guilty, an individual will be liable to a fine not exceeding $50,000, imprisonment for a term not exceeding 2 years, or both. 



  • Providing a False and Misleading Statement : If found guilty, an individual will be liable to a fine not exceeding $50,000, imprisonment for a term not exceeding 2 years, or both. 



  • Engaging in business activities without registering as a corporation and utilizing the terms "Limited" and "Berhad"(unregistered entity) improperly: If found guilty, an individual will be liable to a fine not exceeding $50,000, imprisonment for a term not exceeding 2 years, or both.

 


Late Lodgement Fees 

Late lodgement fees generally loom over those who neglect their statutory obligations. When a company or director commits a breach, penalties come knocking at the door. If found guilty, an individual will be liable to a fine not exceeding $50,000, imprisonment for a term not exceeding 2 years, or both.  


Consider a scenario where a required document remains unfiled - this minor misstep could lead to the unsettling possibility of having to pay a composition sum. But wait, there's more! Should the company or director decide to lodge the document later, there will be an additional late lodgement fee. Remember: the longer the lodging is delayed, the higher the lodgement fee climbs, growing larger and more burdensome.   


Therefore, it is essential to tread carefully and ensure timely compliance to avoid these fees. Be sure to stay vigilant and honor your obligations. 

 

Late-Lodgement-Fees-table

Late Lodgement Fees 

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Scenario 1: 

On January 1st, 2021, Company XYZ decided to relocate their office. But here’s the kicker: they were required to update their registered office address by January 15th, 2021– just 14 days after the big move. However, amidst the busy move, the update was thrown to the back of their minds. As a result, they breached Section 143(1) of the Companies Act, where a company must lodge a prescribed form on BizFile+ within 14 days of the office address change. 

To err is human, but sometimes this leads to costly mistakes. It's crucial to stay on top of these things to avoid any penalties or complications. Let's hope Company XYZ learns their lesson and stays compliant moving forward. 



Scenario 2:   

One fine day, Company XYZ found themselves facing yet another predicament. They had an important task at hand: filing their lodgement. According to the rules, they were supposed to complete this task within 30 days. But here's the twist – they chose a lodgement date that fell on February 10th, 2021, a whopping 26 days after the deadline! As a result, Company XYZ suffered a bitter consequence of a S$50 Late Lodgement Fee.  


This turn of events served as a valuable lesson for Company XYZ. They realized the importance of staying on top of deadlines and the consequences of delays. From that day forward, they made a promise to themselves to be more diligent and punctual in meeting their obligations.  


We, too, should learn from the losses of Company XYZ and keep punctuality and compliance at the forefront of our minds -- the keys to a thriving business.  



Late Annual Return Fees 

It is important to stay on top of your game when it comes to filing your annual lodgements, including those annual returns and declarations punctually. Why is that so? Well, according to ACRA, if you happen to miss the filing deadline, you'll have to face the dreaded late lodgement penalty. Ouch! 


Starting from April 30th, 2021, ACRA has revamped the penalty system for late annual lodgements to encourage everyone to meet their statutory obligations on annual reporting promptly. A simplified 2-tier penalty framework is now in the picture:   

If you're running a Variable Capital Company or a Limited Liability Partnership and you are rushing to file your annual return or annual declaration after the filing due date, you'll be let off with a late lodgement penalty of S$300 if it is still within 3 months post due date. Not too pleasant, but hey, it could have been worse. 


Now, if you are late to the party and file your lodgement more than 3 months after the due date, brace yourself for an even steeper late lodgement penalty of S$600. Yikes! 


Therefore, this stresses the importance of marking those deadlines on your calendars and making sure you meet your annual reporting obligations on time.  

  


Develop Your Business with Grof! 

Grof is here to provide expert assistance in helping companies like yours meet corporate compliance requirements and crucial deadlines to avoid penalties. Check out our fuss-free Corporate Secretarial Management packages to make sure you never miss a deadline again! If you have any questions, don't hesitate to reach out us at Grof. We'll get back to you within 24 hours. 

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Your Ultimate Singapore Incorporation Checklist
Explore crucial dos and don'ts, along with essential tips for a successful company registration when establishing your foothold in Singapore!
Your Ultimate Singapore Incorporation Checklist
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Explore crucial dos and don'ts, along with essential tips for a successful company registration when establishing your foothold in Singapore!
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