If you are a director or business professional in Singapore, you have likely heard the term “statutory compliance” a thousand times. But when it comes to the heavy lifting of accounting, a common question arises: Does every single company—even the small or inactive ones—need to prepare a full set of financial statements?
The short answer is yes. Under Section 201 of the Singapore Companies Act, all companies incorporated in Singapore are legally required to prepare financial statements that comply with Singapore Financial Reporting Standards (SFRS). However, the format you file and whether those statements need an audit depends entirely on your company’s size and status.
At Hallmark Corporate Services, we ensure your records meet the 2026 ACRA standards so you can focus on growth without the fear of compliance “red ticks.”
1. The Universal Requirement
Every “live” company in Singapore must prepare a set of financial statements for each financial year. These statements must include:
- Statement of Comprehensive Income (Profit & Loss)
- Statement of Financial Position (Balance Sheet)
- Statement of Changes in Equity
- Statement of Cash Flows
- Notes to the Accounts (Explaining accounting policies)
- Directors’ Statement (Signed by at least two directors)
2. Audit Exemptions: The “Small Company” Concept
While you must prepare statements, you may not need to audit them. In 2026, a company qualifies as a “Small Company” (and is audit-exempt) if it is a private entity that meets at least two of the following three criteria for the immediate past two consecutive financial years:
- Total Annual Revenue: Not exceeding S$10 million.
- Total Assets: Not exceeding S$10 million.
- Number of Employees: Not exceeding 50.
Note: If your company is part of a group, the entire group must meet the “Small Group” criteria for the subsidiary to remain audit-exempt.
3. Filing Exemptions: Who Doesn’t Submit to ACRA?
Preparing statements is one thing; filing them on the public register is another. There is a specific category of companies that are exempt from attaching their financial statements to their Annual Return:
- Solvent Exempt Private Companies (EPCs): An EPC is a private company with no more than 20 shareholders, and no corporate shareholders. If the EPC is solvent (can pay its debts), it only needs to file a Declaration of Solvency. You still prepare the statements, but they stay in your office drawer unless ACRA asks to see them.
- Dormant Relevant Companies: A company that had no accounting transactions during the year and has total assets not exceeding S$500,000 may be exempt from both preparing and filing financial statements.
4. The XBRL Mandate
For companies required to file, 2026 marks another year of strict XBRL (eXtensible Business Reporting Language) enforcement. Most companies must file their financial data in a tagged digital format.
- Full XBRL: For larger or non-publicly accountable companies.
- Simplified XBRL: A “lite” version for smaller companies to reduce the administrative burden.
5. Penalties for Non-Compliance
Failing to prepare or present financial statements at an AGM is a serious breach.
- Late Lodgement Fees: Automatic penalties of S$300 to S$600 for late Annual Returns.
- Composition Sums: Personal fines for directors starting from S$500 per breach.
- Prosecution: Repeated failure can lead to court summons and fines up to S$5,000 per charge.
Conclusion: Compliance is Not Optional
In the transparent business environment of 2026, financial statements are the “health certificate” of your business. Whether you are a solvent EPC or a growing SME, having accurate, SFRS-compliant accounts is the only way to safeguard your directorship.At Hallmark Corporate Services, we provide end-to-end accounting and XBRL filing services. We don’t just “do the books”, we ensure your company remains a “Green Tick” entity in the eyes of ACRA and IRAS.