Reporting requirements for a dormant company

A dormant company in Singapore still has reporting requirements, even though it does not engage in any business activities. Here is a detailed explanation of the reporting requirements for a dormant company:

Definition of a Dormant Company

A company is considered dormant if it has no accounting transactions during a financial year. The following transactions do not count as accounting transactions and thus do not affect dormancy status:

• Payment of penalties, fines, or default charges to the Accounting and Corporate Regulatory Authority (ACRA)

• Maintenance of a registered office

• Appointment of a company secretary

• Keeping of books and registers required by law

• The taking of shares by a subscriber to the memorandum in order to incorporate the company

Annual Return Filing with ACRA

Even if a company is dormant, it must still file an annual return with ACRA. This includes the following:

• Annual Return: The dormant company must file its annual return within 7 months after the end of its financial year. This filing ensures that ACRA has the latest information about the company.

• Annual General Meeting (AGM): A dormant company is required to hold an AGM unless it is exempted. If it is exempted, it must still submit the annual return within the stipulated time frame.

Financial Statements

A dormant company must prepare and keep financial statements, but it may be exempted from the requirement to file these statements with ACRA. To qualify for this exemption:

• The company must be dormant throughout the financial year in question.

• The company must satisfy the substantial asset test, where the total assets do not exceed S$500,000 throughout the financial year.

Tax Filing with the Inland Revenue Authority of Singapore (IRAS)

Even dormant companies must file certain tax documents with IRAS:

• Corporate Income Tax Return (Form C-S/C): Dormant companies must file this form unless they have been granted a waiver. Companies can apply for a waiver if they do not expect to recommence operations or receive any income in the next two years.

• Dormant Company Declaration: If the waiver is approved, the company must file the Dormant Company Declaration with IRAS to confirm its dormant status.

GST (Goods and Services Tax)

If the dormant company is registered for GST, it must continue to submit nil GST returns for each accounting period, unless it is deregistered for GST. Deregistration may be necessary if the company does not intend to make taxable supplies in the future.

Other Compliance Requirements

• Registered Office and Company Secretary: The dormant company must maintain a registered office address and appoint a company secretary within six months of incorporation.

• Record Keeping: The company must keep proper records and books of accounts as required by law, even if no transactions are taking place.

Resuming Activities

If a dormant company resumes activities, it must notify ACRA and IRAS immediately and comply with the usual reporting and filing requirements of an active company.

Conclusion

In summary, while a dormant company in Singapore has fewer reporting requirements compared to an active company, it is still required to comply with certain regulatory and statutory obligations. This includes filing the annual return with ACRA, preparing financial statements (with potential exemptions), filing tax returns with IRAS, and maintaining a registered office and company secretary. Failure to comply with these requirements can result in penalties and legal issues.