Corporate Compliance Requirement | Dormant Company Filing Requirement
This article is to share with you more information about the Dormant Company Filing Requirement which 3E Accounting will take care for you if you engaged our services. Feel free to contact us should you have any queries always.
What is considered dormant company?
The definition of dormancy differs somewhat between IRAS (Internal Revenue Authority of Singapore) and ACRA (Accounting and Corporate Regulatory Authority). In some cases, a company that is defined as “dormant” by IRAS can be considered as “active” by ACRA.
Dormant company according to IRAS
A company that does not have any revenue or income during a given financial period is considered Dormant by IRAS even though it may have booked or incurred expenses.
Dormant company according to ACRA
ACRA defines a company is considered as dormant during a period in which no accounting transaction occurs.
Transactions that will not affect the dormant status of the company:
- The appointment of a secretary of a company;
- The appointment of an auditor;
- The maintenance of a registered office;
- The keeping of registers and books;
- The payment of fees to the Registrar or an amount of any fine or default penalty paid to the Registrar (ACRA)
- The taking of shares in the company by a subscriber to the memorandum in pursuance of an undertaking of his in the memorandum.
What filing requirement is needed for dormant company?
Obligation to File Income Tax Return (Form C-S/ C)
A dormant company is one that does not carry on business and had no income for the whole of the basis period. For example, if a company did not carry on business and had no income for the whole of the basis period ending in year 2016, it will be regarded as a dormant company for Year of Assessment (YA) 2017.
A dormant company must submit its Income Tax Return unless the company has been granted waiver of Income Tax Return submission.
From $500 (W/GST $535), you may engage our submission of Income Tax Return (Form C-S/ C) for dormant company services.
Applying for a Waiver of Income Tax Return (Form C-S/ C) Submission
A dormant company can apply to IRAS to be released from its obligation to file its income tax return (Form C-S/ C) if the qualifying conditions are satisfied. This is commonly known as the “Waiver to Submit Income Tax Return”. The qualifying conditions for the company are:
- It must be dormant and has submitted either its Form C-S or Form C, accounts and tax computations up to the date of cessation of business;
- It must not own any investments (e.g. shares, real properties, fixed deposits). If the company owns investments, it must not derive any income from these investments;
- It must have been de-registered for Goods and Services Tax (GST) purposes prior to this application if it had previously been a GST-registered company; and
- It must not have the intention to recommence business within the next 2 years.
With $250 (W/GST $267.50) only, we can assist you in applying for a Waiver of Income Tax Return.
Once a dormant company re-commences business, or starts to receive any income, the company has to notify IRAS within one month from the date the income is earned or received by completing and submitting the form “Request for Income Tax Return (Form C-S/ C) and Notification of New Financial Year End”.
Annual Return Filing requirement
With effect from 3 January 2016, A dormant non-listed company (other than a subsidiary of a listed company) is exempt from requirement to prepare financial statements, if:
(a) the company fulfils the substantial assets test; and
(b) the company has been dormant from the time of formation or since the end of the previous financial year.
According to the substantial assets test, the total assets of the company at any time within the financial year must not exceed $500,000. For parent company, the consolidated total assets of group at any time within the financial year must not exceed $500,000.
Dormant listed companies and their subsidiaries, and dormant unlisted companies which do not fulfill the substantial asset test must prepare financial statements but are exempt from audit. This remains unchanged from the current position.
For dormant company which is exempted to prepare financial statement, you may still choose to voluntarily prepare the financial statement and we can assist to prepare it at the fee from $500 (W/GST $535).
Kindly remind that all dormant companies will still need to prepare its accounts in accordance with SFRS (Singapore accounting standards), convene its AGM physically or by written means and complete annual return filings with ACRA within prescribed time limits. We can assist you to prepare the account at a minimum fees of $500 (W/GST $535) if the company is dormant. Please refer Dormant Company Package Fee for more information.
The dormant companies are still required to file their annual returns under the Companies Act within one month of holding the AGM or the passing of written resolutions in place of the AGM. Kindly remind that annual return filing is part of our Secretarial Packages and we are charging only at $700 (W/GST $749) per year. Please see Corporate Secretarial Services for detail package information.