Change of Company's Principal Activity
- a22162
- Dec 23, 2024
- 4 min read
Change Principal Activity Singapore
Change of company's principal activity: When a company shifts its focus to a different line of business
To change your company's principal activity in Singapore, you need to inform both the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS). Here's a general outline of the process:
1. Determine the New Principal Activity:
Identify the new primary business activity that generates the most revenue or consumes the most resources.
Find the appropriate Singapore Standard Industrial Classification (SSIC) code for this activity. You can use the SSIC search tool on the Singapore government's website to find the correct code.
2. Notify ACRA:
Log in to BizFile+ using your CorpPass.
Go to "Update Company Particulars" and select "Change in Activity."
Enter the new principal activity and its corresponding SSIC code.
Specify the effective date of the change.
Submit the application.
3. Notify IRAS:
Send an email to myTax Mail with the following information:
Effective date of the change in business activity
Copy of the Business Profile extracted from ACRA's BizFile+
Important Notes:
Timeliness: Notify ACRA within 14 days of the change in principal activity.
Penalties: Failure to notify ACRA on time may result in fines of up to SGD 5,000.
Licenses and Permits: If the change in principal activity requires new licenses or permits, ensure you obtain them before commencing the new activity.
Tax Implications: Consult with a tax advisor to understand the potential tax implications of the change in principal activity.
Here's more information on changing your company's principal activity in Singapore:
1. Company Constitution and Shareholders' Approval:
Review your company's constitution: It may contain restrictions or procedures for changing the principal activity.
Obtain shareholder approval: If your company's constitution requires it, you'll need to pass a resolution at a general meeting of shareholders to approve the change.
2. Potential Impact on Licenses and Permits:
Identify any licenses or permits your company currently holds that may be affected by the change in principal activity.
Determine if you need to apply for new licenses or permits or amend existing ones.
Consider the time and cost associated with obtaining or amending licenses.
3. Impact on Employment Contracts:
Review your employees' contracts: Some contracts may have clauses related to the nature of the company's business.
Consider the potential impact of the change on your employees and whether any amendments to their contracts are necessary.
4. Implications for Intellectual Property:
Assess if the change in principal activity will affect your company's intellectual property rights, such as trademarks or patents.
Consider whether you need to update or register new intellectual property rights to align with the new business activity.
5. Communication with Stakeholders:
Inform key stakeholders about the change in principal activity, such as customers, suppliers, and investors.
Communicate the reasons for the change and how it will benefit the company.
6. Post-Change Considerations:
Monitor the performance of the company under the new principal activity.
Review and update your business plan to reflect the new direction.
Stay informed about any regulatory changes that may affect your new business activity.
Sample Resolution
RESOLUTION
RESOLVED that the Shareholders of [Company Name] ("the Company") hereby approve the change of the Company's principal activity from [Current Principal Activity] to [New Principal Activity], with effect from [Effective Date].
FURTHER RESOLVED that the Directors of the Company are hereby authorized to do all such acts and things as may be necessary or expedient to give effect to this Resolution.
Passed this [Date] at a General Meeting of the Shareholders of the Company duly convened and held.
[Name and Designation of Chairperson]
[Name and Designation of Company Secretary]
Notes:
Replace the bracketed information with the specific details of your company.
Ensure the resolution is properly worded and reflects the specific requirements of your company's constitution and Singaporean law.
Obtain the necessary signatures from the Chairperson and Company Secretary.
Maintain proper records of the meeting, including attendance lists and minutes.
Additional Resources:
ACRA website: https://www.acra.gov.sg/
IRAS website: https://www.iras.gov.sg/
Singapore Business Federation (SBF): https://www.sbf.org.sg/
By carefully considering these factors and following the necessary procedures, you can ensure a smooth transition when changing your company's principal activity in Singapore.
How Bestar can Help
Bestar can provide invaluable assistance when changing your company's principal activity in Singapore. Here's how we can help:
Company Constitution and Legal Compliance: We can review your company's constitution to ensure the change complies with its provisions and advise on any necessary amendments.
Shareholder Approval: We can guide you on the proper procedures for obtaining shareholder approval, including drafting resolutions and ensuring compliance with corporate governance requirements.
Regulatory Compliance: We can help you navigate the legal and regulatory framework surrounding the change, including understanding and meeting the requirements of ACRA, IRAS, and other relevant authorities.
Contractual Review: We can review and advise on any necessary amendments to contracts with employees, suppliers, or customers due to the change in principal activity.
Financial Impact Assessment: We can analyze the financial implications of the change, including potential tax consequences, changes in accounting methods, and the impact on financial statements.
Tax Planning and Optimization: We can help you identify and implement tax-efficient strategies to minimize your tax liability after the change in principal activity.
Financial Reporting: We can assist with updating your financial records and preparing financial statements to reflect the new principal activity.
Compliance with Accounting Standards: We can ensure your financial reporting complies with relevant accounting standards, such as Singapore Financial Reporting Standards (SFRS).
Tax Implications: We can provide expert advice on the tax implications of the change in principal activity, including potential tax liabilities, deductions, and incentives.
Tax Planning and Optimization: We can help you develop tax-efficient strategies to minimize your tax burden, such as claiming eligible deductions and taking advantage of tax incentives.
Tax Compliance: We can assist with preparing and filing tax returns, ensuring compliance with tax laws and regulations.
Tax Audits: We can represent you in tax audits and help resolve any tax-related disputes with the tax authorities.
By engaging the expertise of Bestar, you can ensure a smooth and compliant transition when changing your company's principal activity in Singapore. We can provide valuable guidance, minimize risks, and help you maximize the benefits of your new business direction.
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