Enforcement action for annual return filing breaches

All companies are required to file their annual returns on time. There is a late lodgement fee of $300 imposed against companies for annual returns filed after the deadline. The relevant composition for late holding of the annual general meeting will also be imposed at the point of filing the annual return.

Court prosecution:

ACRA may prosecute the directors in court if:

• they do not accept the offer of composition or
• when composition is not offered.

ACRA may also not offer composition after a summons is issued. ACRA will serve the summons to the director at his residential address by registered post. The summons will indicate the date, time and which Court the director has to appear before. If the director fails to attend court, a warrant for his arrest will be issued by the court. The director must attend court even if he has made representations to ACRA.

In court, the director can decide whether to plead guilty or claim trial to the charges. If the director is convicted by the court, he may be fined up to a maximum of $5,000 per charge.

Disqualification of directors for filing breaches:

A director who is convicted of three or more filing related offences under the Companies Act within a period of five years will be disqualified as a director, under S155 of the Companies Act. Once disqualified, an individual will not be allowed to be a company director or take part in the management of any local or foreign company for five years, effective from the date of the conviction. A disqualified director cannot take on any new appointment as a director, or be in any way directly or indirectly concerned or take part in the management of a company. ACRA will also disqualify a director with at least three companies struck off by ACRA within a period of five years.

Striking off companies that failed to file ARs:

ACRA can strike off a company if there is reasonable cause to believe that a company is not carrying on business or is not in operation (e.g. fails to file annual returns for consecutive years.) 

ACRA will also disqualify a director with at least three companies struck off by ACRA within a period of five years. Once disqualified, an individual will not be allowed to be a company director or take part in the management of any local or foreign company for five years, effective from the date on which the third company is struck off. A disqualified director cannot take on any new appointment as a director, or be in any way directly or indirectly concerned or take part in the management of a company. For the avoidance of doubt, the striking off of the three companies refers to striking off initiated by the Registrar and does not include voluntary applications for striking off.