Small Company : The Changed Concept for Audit Exemption
With effect from 1 July 2015, the Companies Act (Amendment) 2014 has brought about a major change in the concept of ‘Audit Exemption’. In order to improve the corporate governance landscape in Singapore, to improve business flexibility and to reduce the regulatory burden on companies, the Singapore government brought about extensive changes in the Amendments of the Singapore Companies Act, since its enactment in 1967. The introduction of Small Company concept to get audit exemption is one such major change.
Previously a company was exempted from audit requirement if
- It is exempt private company (a company with less than 20 shareholders and having no corporate shareholders)
- Its revenue is less than S$ 5 Million Or
- It is a dormant company
From 1 July 2015, the Exempt Private Company will become an outdated concept. Instead, a revised ‘Small Company’ is introduced under which Singapore incorporated companies can avail audit exemption. A company is categorized as a Small Company if it meets any of the two following requisites
- Has revenue less than S$ 10 Million
- Has gross assets less than S$ 10 Million and
- Have less than 50 employees at the end of year
