Exempt companies in Singapore are types of companies enjoying exemptions from certain regulatory and statutory requirements, especially around audits. The consultancy expert that I am, shall be delighted to discuss the two major classifications of exempt companies: Exempt Private Companies (EPCs) and Small Companies under the Companies Act.
1. Exempt Private Companies (EPCs):
An EPC is a private company limited by shares with a maximum of 20 shareholders, none of whom is a corporate body. It can be fully owned by directors, and hence the majority of SMEs are usually EPCs. The advantage of being an EPC is that it may be exempted from conducting an annual audit, if it falls within the criteria leading to exemption under the Small Company Exemption, described below.
2. Small Company Exemption:
A company may be considered as a “small company” and hence will be exempted from audits when its financial statements exhibit at least two of the three criteria below in the past two successive financial years:
- The revenue of the company does not exceed $10 million SGD.
- The total assets of the company do not exceed $10 million SGD.
- The number of employees does not exceed 50 persons.
Where the company is a group company, the group must as a whole satisfy these criteria in a consolidated manner before the exemption applies. All this will help the small companies avoid unnecessary costs and time spent on statutory audits so that their energies can be wholly applied to growth.
This, in other words, means an exempt company enjoys lesser regulatory requirements-particularly those relating to auditing. Qualification needs to be checked on its merits by a professional in order for confirmation to be made and preparation done for the rest of legal obligations. One IBC, with its extensive expertise and global presence, provides comprehensive consultancy services, ensuring that businesses accurately assess their qualifications and prepare for all remaining legal obligations, streamlining compliance processes to support optimal business growth.