ACRA launches initiatives promoting voluntary compliance amongst companies

Agency intends to develop voluntary compliance on corporate regulatory requirements through non-penal measures and public education.

The Accounting and Corporate Regulatory Authority (ACRA) announced on Thursday that it will be implementing several initiative as an impetus for locally incorporated companies to comply with the corporate regulatory requirements as well as cknowledge companies who have made the effort to comply.

Through these initiatives, ACRA aims to inculcate a culture of voluntary compliance among companies which thus far, had treated payment of late penalties and composition fines imposed as part of costs of doing business.

For a start, ACRA will focus on the preparation of the annual financial statements, the holding of Annual General Meeting (AGM) and the filing of the Annual Returns (AR).

Instead of resorting to prosecutorial action, ACRA would like to first encourage compliance through various non-penal measures and public education to raise awareness on the importance of compliance by implementing the measures below:

Colour-coded Compliance Rating and Certificate of Compliance – this new service will be rolled out on 24 April. This rating system recognises companies with a good record for holding its AGM on time, tabling and filing up-to-date financial statements and AR for the year in question with a positive compliance rating (in the form of a green tick) which makes them eligible for a Certificate of Compliance; while those which were non-compliant in their filing would be given a negative rating (in the form of a red cross).

The compliance rating record and other relevant information for all locally incorporated companies will be recorded on ACRA's free online Directory of Registered Entities for inspection by the public.

End of Financial Year Reminder Letters – To be implemented on 3 May, this is new value-added reminder service provided to private and non-listed public companies to alert them that their FY has come to an end and remind them of the actions required to meet the regulatory requirements.

Shorter Extension of Time – To be implemented on 1 July, this will reduce the maximum allowable period for holding of AGM and laying of financial statements at AGM, from three months to two months.