Annual Filing Requirements for a Dormant Company in Singapore

A company may become dormant for various reasons, such as during a restructuring phase, cessation of trade, or while waiting for a new project to commence. While a dormant company in Singapore is not actively trading, it is not entirely free from its statutory obligations. Understanding the specific annual filing requirements for a dormant company is essential to maintain its legal standing and avoid penalties.

This guide details the compliance responsibilities for dormant companies in Singapore. We will explain the definition of a dormant company, its annual filing requirements with ACRA and IRAS, and the exemptions available to simplify the process.

Key Takeaways

• A company is considered dormant by ACRA if it has no business activity or income during a financial year, with certain transactions (e.g., appointing a company secretary) excluded from this definition.
• IRAS defines dormancy based on the absence of income or revenue, even if expenses are incurred.
• Dormant companies must file an Annual Return (AR) with ACRA within seven months of their Financial Year End (FYE).
• Financial statements are required but may qualify for exemptions if specific criteria are met, such as total assets not exceeding S$500,000.
• Proper compliance ensures the dormant company remains in good standing, preserving its legal entity, name, and history for future activation.

What is a Dormant Company in Singapore?

A company is considered dormant by the Accounting and Corporate Regulatory Authority (ACRA) if it has had no business activity or income during a financial year. According to the Companies Act, “no business activity” means there have been no accounting transactions.

However, certain transactions are disregarded and do not affect a company’s dormant status. These include:

• The appointment of a company secretary.
• The appointment of an auditor.
• The maintenance of a registered office.
• The payment of fees to ACRA (e.g., penalties, filing fees).
• The issuance or transfer of shares.

The Inland Revenue Authority of Singapore (IRAS) has a slightly different definition. For tax purposes, a company is considered dormant if it has not generated any income or revenue. A company that has incurred expenses but generated no income may still be considered dormant by IRAS.

Related Read: Managing a Dormant Company in Singapore: Definition, Reactivation & Best Practices

Annual Filing Requirements for a Dormant Company

Even without active business operations, a dormant company must adhere to specific annual filing requirements to remain compliant with Singaporean law. These obligations are primarily with ACRA and IRAS.

1. Filing Annual Returns With ACRA

All Singapore-incorporated companies, including dormant ones, are required to file an Annual Return (AR) with ACRA. The AR is an electronic form that contains key information about the company, such as the names of directors, shareholders, and the date of its Annual General Meeting (AGM).

The deadline for filing the AR is within seven months of the company’s Financial Year End (FYE). For dormant companies, the process is streamlined, but the obligation remains.

Dispensation From Holding an AGM

A dormant company can be exempted from holding an AGM if all members agree to dispense with it. This resolution must be passed by all shareholders and can simplify the annual compliance process significantly. Even with this dispensation, the company must still file its AR.

2. Preparation of Financial Statements

Under the Companies Act, every company must prepare financial statements. However, dormant companies may qualify for an exemption from the requirement to prepare audited financial statements. These requirements include:

• The company must have been dormant from the time of its incorporation or the end of the previous financial year
• The directors of the relevant company must have lodged a statement by the directors with the Registrar stating that the company has been dormant for the relevant period
  • It must also state that no notice has been received under section section 201A(3) of the CA in relation to the financial year, and
  • The company’s accounting and other records required have been kept in accordance with section 199 of the CA
• The company must not be a listed company or a subsidiary company of a listed company
• The company must not have total assets exceeding S$500,000 in value
• If it is a parent company or belongs to a group, the consolidated total assets at any time of the financial year must not exceed S$500,000 in value

3. Filing Tax Returns With IRAS

A dormant company must still address its tax obligations with IRAS. The specific requirements depend on whether IRAS has been notified of the company’s dormant status.

Typically, a dormant company can file a simplified Income Tax Return, “Form for dormant company”, by completing 2 essential fields using the relevant digital service on IRAS. Dormant companies doing this need not submit their financial statements to IRAS.

Requesting a Waiver to File Income Tax Returns

A dormant company can also apply for a waiver from IRAS to submit its Income Tax Return (Form C-S/ Form C). To qualify for this waiver, the company must meet the following criteria:

• The company must be dormant and have submitted its Form C-S/Form C and financial accounts up to the date of cessation of business.
• The company must not own any investments (e.g., shares, properties).
• It must have been de-registered for Goods and Services Tax (GST) purposes before the application if it was previously registered.
• The company must not have any intention to recommence business within the next two years.

Once IRAS approves the waiver, the company is relieved of its obligation to file an income tax return annually. However, the company must notify IRAS within one month if it restarts business activities or begins to receive any income.

Related Read: Tax Filing Requirements for a Dormant Company in Singapore

Why is it Important to Maintain Compliance?

Neglecting the annual filing requirements for a dormant company can lead to significant consequences. Both ACRA and IRAS impose penalties for late or non-filing, which can accumulate over time.

• ACRA Penalties: Late filing of the Annual Return incurs a late lodgment penalty fee of up to S$600 per late filing. Persistent failure to comply can result in the company or directors facing court prosecution and be disqualified from managing other companies.
• IRAS Penalties: Failure to file tax returns or notify IRAS of the commencement of business can lead to fines and legal action. Maintaining a good compliance record is crucial, even during periods of inactivity.

Properly managing a dormant company ensures it remains in good standing, ready to be activated when a new business opportunity arises. It preserves the company’s legal entity, name, and history, which can be valuable assets.

Navigate Your Dormant Company Filing Requirements With Ease

Navigating the annual filing requirements for a dormant company can seem straightforward, but overlooking a single detail can lead to unnecessary penalties. Ensuring all obligations with ACRA and IRAS are met on time protects the company and its directors from legal and financial repercussions.

By leveraging expert corporate secretarial services, you can ensure your dormant company remains compliant without the administrative burden. Our team can manage your annual filings, apply for relevant waivers, and provide strategic advice, allowing you to focus on future business plans with confidence.

About the Author

Lee Wei Hsiung

Wei Hsiung is the Head of Corporate Secretarial Division of InCorp Global. He has more than 20 years of experience in the corporate secretarial profession. His extensive experience includes all aspects of corporate secretarial compliance, company registration, initial public offering (IPO), corporate restructuring and various corporate actions.

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