Great questions, GSM8. I've responded below.
GSM8 wrote:Thanks SE. Appreciate all your accurate and to the point information. A few additional doubts I had related to OP's question. As you say, monthly paychecks may not be needed, but aren't timely monthly CPF contributions due based on the "notional" monthly salary? (at least for owner-employees who are Singapore citizen/PR)
Yes, there is the idea of ordinary wages and additional wages (citizens and PR's only). The point is this. If you were to pay an employee $6000 per month, every month, there would be CPF taken out amounting to about $2200 each month for employer plus employee share.
If I try to avoid monthly CPF withholding by paying wages only every other month in the amount of $12,000, then I would still only pay $2200 because CPF wages are capped at $6000. I think the CPF board doesn't like this, and such wage payment arrangements will fall under the Additional Wages category where there are no limits on contributions until an annual wage ceiling is reached.
I don't know all the details, and the additional wages ceiling is substantially larger than ordinary wages, ($102K vs $72K, if I recall), so it would seen that CPF board "encourages" people to pay monthly.
The OP would be well advised to check with the CPF board for his particular situation. For example, if periodic payments are less than $6000, then it really doesn't matter because no CPF cap has been reached. And, when I ran the calculator online, paying myself only $10,000 in two separate months, the calculator said everything was ordinary wages, and I don't think that is correct, but I don't know... the OP may have clear sailing with periodic payments.
In the case of an exempt Pte Ltd where a director-shareholder has a basic understanding of tax and company filings (but is not a tax or accounting professional) and is considering being company secretary, would you know of any publicly accessible resources or websites that illustrate a typical format ACRA expects, as a guide for filing of AGM/EGM resolutions and reports?
Also, is my understanding correct that 6 months are available from the end of the first year for filing of AGM report, so a new company technically does not have to file anything for the first 18 months?
Yes, the six month rule is correct, as I recall.
I have never seen any kind of detailed resource about what needs to be filed and when. In the end, it is all controlled by the companies act, which specifies notice periods that must be given, and the conditions under which directors can make financial decisions, and the conditions under which a shareholder meeting must be called.
I do know that certain types of business must be transacted through the use of directors resolutions. For example, there must be a formal resolution authorizing the opening of a bank account. The director creates these resolutions, no shareholder involvement required. It's a formalization of the business decisions made by the directors. A directors meeting is required to create a directors resolution.
All that is required for this is an A4 sheet of paper with company name and registration at the top. Then a sentence that says something like, "On <Date> a meeting of the directors was held for purposes of conducting the business of the company, and the following resolution was passed unanimously by the directors.
Then comes the resolution, for example, "The directors authorize the opening of a commercial bank account at UOB, in the name of the company. Larry, Curly, and Moe shall have signature authorization on the account, and can sign singly for amounts under $3000 and two or more signatures for amounts exceeding $3000.
Then, it's signed and dated, and presto! You've got a piece of paper that any bank in town will honor to open an account.
What I don't know is the scope of activities that must be covered by such resolutions since my CPA was my secretary in reality, even though I was secretary in name. For example, I never filed a directors resolution to hire an employee or set her pay but did sign lots of other resolutions, all of which I forget... except maybe I signed one accepting the audited financial reports of the company.
Other actions required approval of the shareholders. In this case, there must be a minimum notice period of the meeting, with the items to be considered in the meeting. There are rules for waiving minimum periods as well. The meeting can be an AGM or EGM. Format again is undefined but the contents are: When, where, subject matter to be covered. You might find this in the companies act.
Again, there is a whole scope of corporate activities that require shareholder approval and damned if I know what everyone of them is. But, I can give you a few examples. Directors pay and bonuses must be approved by share holders. So must any change in stock and ownership. Same for creating subsidiaries and certain kinds of financial transactions.
Minutes must be kept at the meetings and their content is specified as well. Who was there, who chaired the meeting, resolutions presented and the outcome of the votes. Shareholders resolutions are usually written up separately, just like a directors resolution, and referred to in the minutes. Would say something like, "At an EGM conducted on <Date> after formal notice was given, shareholders approved by a unanimous vote a resolution titled, "Resolution to award directors fees for fiscal year 1837." Then comes the verbiage about how much and when and under what conditions.
All of this crap is filed in the corporate minutes book, which is theoretically available for public inspection. Unless your company gets sued, no one will ever ask to see your corporate minutes book, and if you don't have it, you can lose your corporate shield for actions taken. That is to say, you don't need to file the contents of your corporate minutes book with the ACRA or anyone else.
Most government reporting is done online and is pretty self explanatory. You file your report on the IRAS BizFile website... synopsis of financial reports, directors, shareholders, outstanding debts, company condition, lawsuits, questionable financial transactions. You fill in the blanks and check the boxes. Ditto for your tax return but you best have a reasonable understanding of accounting to properly file the financials that go with the tax return.
