Pursuant to the Companies (Amendment) Bill 2017, the following key legislative amendments will take effect from 31 August 2018:-
Exemption from Holding Annual General Meetings
Private companies need not hold annual general meetings (“AGMs”) if they send their financial statements to members within five months of the financial year end (“FYE”).
However, there are safeguards. private companies must still hold:
(a) an AGM if any shareholder requests for it not later than 14 days before the end of the 6th month after FYE; or
(b) a general meeting to lay financial statements if any shareholder or auditor requests for it not later than 14 days after the financial statements are sent out.
Aligning timelines for AGM and Annual Returns (“ARs”) to FYE
Requirements on holding AGMs and filing annual returns have been simplified and deadlines are now tied to a company's FYE as follows:
Listed companies must hold an AGM within 4 months after FYE and file an AR within 5 months after FYE.
Other companies must hold an AGM within 6 months after FYE and file an AR within 7 months after FYE.
The Annual Return can be filed only:
after an AGM has been held;
after financial statements are sent if company need not hold AGM; or
after the FYE for a private dormant relevant company that is exempted from preparing financial statements.
To prevent companies from arbitrarily changing their FYE, there are safeguards:
(a) Companies must notify the Registrar of their FYE upon incorporation and of any subsequent change;
(b) Unless otherwise approved by the Registrar, the duration of a company's financial year must not be more than 18 months in the year of incorporation; and
(c) Companies must apply to the Registrar for approval to change their FYE if:
- the change in FYE results in a financial year longer than 18 months; or
- the FYE was changed within the last 5 years.
Companies incorporated before 31 August 2018 will have their FYE deemed by law to be the anniversary of the date previously notified (via an annual return/change of FYE transaction) to the Registrar as their FYE date. In the absence of such notification before 31 August 2018, the anniversary of the date of incorporation will be deemed by law to be their FYE.
Companies intending to change their FYE for the current or previous financial years may thus wish to change their FYE before 31 August 2018 by lodging a "Change of Financial Year End" transaction via BizFile+. The transaction is free of charge.
Simplified AR filing process for Solvent EPCs and dormant private relevant companies
In addition, the process for Solvent EPCs and dormant private relevant companies to file ARs has also been simplified. They will be eligible to file Simplified ARs if they fulfil the following requirements:
(a) the company is not preparing audited financial statements; and
(b) the company is not required to file financial statements with ACRA.
Similar to the current process of filing ARs, the Simplified ARS can be filed only:
(a) after an AGM has been held if the company needs to hold an AGM; or
(b) after financial statements is sent to members if the company need not hold AGM; or
(c)after FYE for a private dormant relevant company that is exempted from preparing financial statements.