Director Fee vs. Salary

[Strong Eagle]

Thanks. I'm new at all this as my former director (accountant/friend) is resigning. Difference of view on obliging his consistent requests to join his many MLM projects. He's staying on to handle the accounts and stuff but, wants out of directorship. Its all confusing to me but, I've gotta go at this from scratch as there is little guidance coming from that end (sheesh). So, greatly appreciate your feedback and guidance. Heaps-of-thanks.

OK - after reading this, I get that you just want a person to be the sole director of the company. Why aren't you a director if you own 100 percent of the company?

[tadbubs]

Nope, I'm not a director. This person will just be filling the role as per legal policy and government requirements for keeping a company going. There are no daily activities. I basically do all the work, pay into my company bank account and file taxes at the end of the year...with all the other audit, secretarial stuff that my former director will do (I'll pay him $150 per month to do that).

[Strong Eagle]

Nope, I'm not a director. This person will just be filling the role as per legal policy and government requirements for keeping a company going. There are no daily activities. I basically do all the work, pay into my company bank account and file taxes at the end of the year...with all the other audit, secretarial stuff that my former director will do (I'll pay him $150 per month to do that).

In that case you can pay a minimum amount in directors fees, just like you would pay if you were to 'rent' a nominee director from one of the firms. They charge $1500 to $3000 per year for such a service.

I notice from another thread that you are here on EP. Is this the company that is sponsoring your EP? Reason I ask is that if you have your EP from this company, you can also be the director. Any company with one director must have an outside secretary anyway.

And if you have your EP from another company, then you are violating the terms of your EP.

Edit: I see that you have EP through your own company so you can be director.

[livingontheedge]

Your Director is also your auditor?

[Strong Eagle]

Your Director is also your auditor?

Actually, that's OK... a EPC isn't required to submit audited statements to ACRA unless it is an Entrepass type business, or making a shitpot of money... I fergits what the number is but it is in the millions. But, he must have a separate secretary as long as there is only one director.

[tadbubs]

Yep, you are correct on all points. Thanks Strong E' for highlighting what my options are. I was not aware I had that flexibility.

[tadbubs]

Living' my director was my accountant and secretary. Perhaps I'm using the term 'auditor' incorrectly.

[sundaymorningstaple]

Your Director is also your auditor?

Actually, that's OK... a EPC isn't required to submit audited statements to ACRA unless it is an Entrepass type business, or making a shitpot of money... I fergits what the number is but it is in the millions. But, he must have a separate secretary as long as there is only one director.

Over 5 million gross revenue.

[Strong Eagle]

Living' my director was my accountant and secretary. Perhaps I'm using the term 'auditor' incorrectly.

Public companies and certain private entities must provided audited statements. Audited statements must characterize the nature of revenues and expenses, note any transactions between directors and the company, note any exceptions to GAAP, and list contingent liabilities. The auditor must be independent of the person who does the books, although they can be in the same company. None of this applies to exempt private companies.

Sounds like you are referring to a bookkeeper/accountant... someone who posts the transactions, then ensures that the financial statements are in order.

Since you just got your EP renewed, I can't think of a reason why you cannot be your own company's director... except perhaps that an outside director 'looks' better to the authorities... but that is pure speculation on my part.

[tadbubs]

Thanks Strong Eagle. I've just notified my accountant to make-it-me.

[Strong Eagle]

https://acra.gov.sg/components/wirefram ... =1241#1245

[tadbubs]

Very helpful link. Thanks Strong Eagle.

[tammyeoyeo]

If you make a lot of money, then going for Dividends would be best, Singapore has Pte Ltd tax benefits as well as max corporate tax of 17% instead of personal income 20%

[tadbubs]

Haha, okay I'll bank on that when I get where I want to be. Thanks Tammy'

[sundaymorningstaple]

Be very careful of Tammy's suggestion, as has been pointed out earlier.