We have an exempt private company in Singapore. Are there any filing / audit formalities for the year. If so what will be the costs?

Answer:

Audit Exemption for Small Companies in Singapore. Every company must appoint a company secretary within 6 months of its incorporation. Please see our firm quotation for company secretarial services. Every company must appoint an Auditor within 3 months of its incorporation. However there are audit exemption for small companies.

Please see the legislation as below:

The New Audit Exemption regulation introduced on 1 July 2015 allows more categories of companies to qualify for exemption from conducting statutory audit of their financial statements. This implies that larger number of small to medium companies can exempt themselves from conducting Audit Assurance.

Highlights

1. The concept of Private Exempt Company was removed; and
2. Revenue threshold (for Statutory Audit) was increased from SGD 5 million to
SGD 10 million.

Reason for Introducing New Audit Exemption

Similar exemptions were made in the year 2003 and 2005. The purpose of introducing such exemption is to reduce regulatory burden and compliance cost (Audit fees) for smaller companies that have a small market and limited budget.

What is Meant by Private Exempt Company Concept?

Criteria for Exempt Private Company

* Not having more than 20 individual members (shareholders); and
* Not having corporate shareholders (shares held by another company).

Prior to 1 July 2015, only Exempt Private Companies (EPCs) qualifies under Singapore
law to be exempted from statutory audit, if:

* Annual revenue is less than SGD $5 million SGD (US$3.61 million)
* Have less than 20 shareholders
* Have no corporate shareholders
* Are not part of a group of companies

Criteria for Audit Exemption for Small Companies

* The concept of private exempt company has been removed, which means companies with more than 20 shareholders which previously were required to file an annual audit with ACRA will now count as exempt. A private company which has corporate shareholders but fulfils the criteria can be entitled to the small company audit exemption.

3 Quantitative Criteria

1. Total annual revenue of not more than SGD $10 million (for the entire financial year); Does the private company fulfil any 2?

2. Total assets of not more than SGD $10 million (as at financial year end);

3. Number of employees of not more than 50 (full time employees as financial year end).

Do take note: The earlier exemption was applicable to exempt private companies with annual revenue of SGD$5 million or less for the Financial Year. Safeguards to the Audit Exemption for Small Companies. No policy comes without the safeguards. Existing safeguards will be retained, such as requiring all companies to keep proper accounting records, and empowering shareholders with at least 5% voting rights to require a company to prepare audited accounts.

If you need further information or clarification on:

1. Whether your Company is exempted from audit?
2. Which financial year it will be effective?
3. Whether your company is qualified as a small company under the new Companies
Act?

Please contact us.