Q:
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What are the qualification criteria for a small company?
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A:
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A company qualifies as a small company if:
1.
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it is a private company in the financial year in question; and
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2.
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it meets at least 2 of 3 following criteria for immediate past two consecutive financial years:
(1)
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Total annual revenue of not more than S$10 million;
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(2)
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Total assets of not more than S$10 million;
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(3)
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Total number of employees not more than 50.
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For a company which is part of a group:
1.
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the company must qualify as a small company; and
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2.
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entire group must be a “small group”, “small group” must meet at least 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years:
(1)
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Consolidated revenue of not more than S$10 million;
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(2)
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Consolidated total assets of not more than S$10 million;
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(3)
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Total number of employees of the group of not more than 50.
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Q:
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When company will disqualify as small company?
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A:
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Where a company has qualified as a small company, it continues to be a small company for subsequent financial years until it is disqualified. A small company is disqualified if:
1.
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It ceases to be a private company at any time during a financial year; or
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2.
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It does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years.
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Q:
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How do companies determine their number of employees?
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A:
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The number of employees is based on the number of full-time employees employed by the company at the end of the financial year.
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Q:
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If the holding company is a foreign company, how do you determine the consolidated total revenue and consolidated total assets for the purpose of determining whether the group is a small group?
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A:
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Even where the holding company is a foreign company, a Singapore subsidiary will need to determine whether the group to which it belongs qualifies as a small group, to determine if it can qualify for the small company audit exemption. Where the holding company has prepared consolidated financial statements, the “consolidated total assets” and “consolidated revenue” of the group shall be determined in accordance with the accounting standards applicable to the group. Where the holding company does not prepare consolidated financial statements, the consolidated total assets should be determined by the aggregation of the total assets of all the members of the group, and the consolidated revenue should be determined by the aggregated revenue of all the members of the group
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Q:
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If company is exempt from audit, is the company still required to prepare and file my annual accounts?
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A:
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Yes, company still required to prepare and file unaudited annual financial statements. Among other things, company’s annual financial statements are the main basis for calculating and preparing corporate tax return. The only difference is that if the company is exempt from audit, it is not required to appoint an audit firm and get the accounts officially audited.
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