Singapore has consistently been described as one of the best places to do business in. With the proliferation of the Internet and easy access to information, more people than before are entering the world of business. It helps that more young people are gaining the entrepreneurial mindset today. According to records from the Accounting & Corporate Regulatory Authority (ACRA), between 4,661 and 6,369 business entities were set up every month between January and June 2016. While the Singapore government makes it easy for aspiring business owners to set up legal corporate entities themselves, it pays to plan carefully. This is especially important when dealing with Private Limited companies, where the legal obligations on the part of company owners are much more complex than those of sole proprietors and partners.
It is very easy for anyone to set up a Private Limited company on BizFile, ACRA’s one-stop business portal for business owners and the public. Provided the name chosen for the company does not contravene rules set by the government and the aspiring owner has all the company and personal details on hand, a company can be set up within an hour on BizFile. It costs only $15 to register a company name and $300 to incorporate the company. Technology has made this initial setup process hassle-free, seamless and simple. What many people do not realise is that while it is extremely easy to jump onto the business bandwagon, it is also extremely easy to land into trouble when legal obligations come their way later.
ACRA has statutory obligations in place that require companies to meet. The Singapore Companies Act mandates that every company has to appoint at least one local Company Secretary within six months of incorporation. It also has to hold its first Annual General Meeting (AGM) within 18 months. While these requirements sound straightforward, fulfilling them might not be so. When a business owner is busy running the day-to-day affairs of the business, it is easy to overlook such legal aspects. This is especially true for a new business owner working alone. When the business is new and the owner Whis the sole Director, salesperson, marketer and operations person, many things will appear to overwhelm him or her. When one is chasing sales to meet month-end closing, the last thing that one wants to worry about is conducting an AGM. Sadly, if legal obligations are not fulfilled, penalties may be imposed on the business.
Conducting an AGM is more than just sitting down and reminiscing about the company’s activities in the past year. Someone will have to prepare the meeting agenda, the meeting will have to follow a structured format and minutes will have to be taken. Eventually, a report will have to be produced and circulated to the shareholders. An AGM is a serious affair that will be set in stone in the annals of the company. There are other matters that new business owners will have to worry about too, like establishing and maintaining statutory registers and filing changes within the company with ACRA. It would help the business owners greatly if such specific tasks like transferring and issuing of shares, appointments and resignation of officers and even the changes in the Memorandum of Articles and Association (MA&A), were recorded by a company dedicated to these tasks.
It makes good business sense to leave such administrative tasks to an outsourced company secretarial services provider. Doing so offloads the legal burden from the business owners, ensures they do not miss any statutory deadlines and allows them to focus on growing the company. In the long term, this ensures the growth, profitability and sustainability of the company.
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AceChamp Business Consultants Pte Ltd is a one-stop integrated business solutions provider for all your corporate needs. Incorporated in Singapore in 2008, AceChamp is an established and accredited agency that offers a comprehensive list of full-fledged services, inclusive but not limited to company incorporation, accounting and tax, business support and immigration services.
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