Parliamentary Question by Mr Zainal Sapari:
To ask the Minister for Finance:
(a) how does ACRA ensure compliance by business establishments to update their registered address within 14 days of any change in their office address;
(b) how many business owners have so far been fined for non-compliance; and
(c) what are the measures ACRA has put in place to encourage compliance.
Parliamentary Reply by Minister for Finance Mr Heng Swee Keat:
1. The law requires all business entities that are registered with ACRA to update their registered office addresses through ACRA’s filing system. The updates must be made within 14 days of the change in address, except for foreign companies which have 30 days to do so. It is convenient for business entities to update any change in their addresses which can be done online such as through ACRA’s filing system or ACRA-On-The-Go mobile app. Filing such updates is also free.
2. The penalty for late filing is up to $350. In addition, if a company fails to update its registered office address, the company and its directors can be prosecuted and be liable on conviction to a fine of up to $5,000 and a penalty for each day of default after conviction of the offence. Furthermore, if a business entity is found to have deliberately not updated its address, or used a false address to avoid contact with creditors or regulators, ACRA will not hesitate to prosecute the business entity and its directors or owners in court. Under the various ACRA-administered Acts, it is an offence to provide false information to ACRA. For instance, an offender is liable on conviction to a fine of up to $50,000 or to imprisonment of up to 2 years, or to both under the Companies Act.
3. From January to August 2017, around 64,000 business entities updated their registered office addresses within the stipulated timelines. Over the same period, 640 business entities were late in doing so and had to pay late filing penalties.
4. To encourage compliance by business entities, ACRA has put in place various measures. First, ACRA conducts regular on-site inspections to check the validity of registered business addresses. Second, ACRA will write to a company director or business owner at his residential address if ACRA’s official correspondences with the business entities are returned undelivered or ACRA receives feedback on an outdated registered office address. The business entity has to update its registered office address before it is allowed to carry out any other filings with ACRA. Third, ACRA conducts outreach programmes such as ACRA@The Heartlands to inform business owners, directors, and interested members of public of the various obligations of running a business.