In Singapore, an Exempt Private Company (EPC) is a Private Company that has a maximum of 20 shareholders. No corporation can hold a direct or indirect beneficial interest in the shares of the EPC. An EPC can also be a company that the Minister has gazetted as an EPC by notification in the Gazette (refer to section 4(1) of the Companies Act). An EPC is required to file an Annual Return by using Bizfile. If the EPC is insolvent and unable to meet its debts as they become payable, the financial accounts have to be submitted to the Registrar. However, if the EPC is solvent and able to pay its debts as and when they fall due, all that is required is an online declaration of solvency.
EPC’s do not have to attach their EPC certificate or the Statement by EPC exempting them from audit requirements (which is currently in PDF format). The declarations will automatically appear in the new format of the Annual Return if the correct company type has been selected. Professionals who are finding the Annual Return on behalf of the EPC may request hard copies of these certificates from the directors of the EPC as evidence of compliance with the required regulations. ACRA itself no longer requires these certificates to be lodged as attachments to the Annual Return.
Companies that have exemption from the requirements of audit need not have an audit of the annual accounts conducted. They can instead prepare unaudited accounts for the purpose of holding their Annual General Meeting as well as for filing with ACRA. If they choose to have their accounts audited, the audited accounts and the auditor’s report should be filed with ACRA. Exemption from audit is available for the following categories of companies:
- Epic’s with revenue not exceeding S$5 million for the financial year starting on or after 1 June 2004
- EPCs with revenue not exceeding S$2.5 million and with the financial year starting on or after 15 May 2003 but before 1 June 2004
- an EPC that is dormant for the financial year starting on or after 15 May 2003
The ACRA may require the accounts to be audited and an auditors report to be submitted to the Registrar if:
- he has reason to believe that there has been a breach of Section 199 which relates to accounting records and control systems or of Section 201 which relates to accounts and reports of the directors of the Companies Act or
- it is in the public interest
Even if an EPC has filed an Annual Return with ACRA, it is still required to file its Income Tax Return in Form C as well as its accounts and its tax calculation with the IRAS on an annual basis.