Do you know the importance of a company check
Before entering into a business partnership, merging your company with another, or connecting with a vendor, it’s important to do some research.
This research commonly involves a company check. But why is it so important to perform a Singapore company check?
A company check helps to verify a business’s history and looks for red flags that can indicate potential illegal financial activities.
Instead of spending a portion of your company’s operating budget verifying another business’s credentials, you can easily perform a KYC (know your customer) check with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore.
How to Use ACRA in Four Steps
The first step in performing a Singapore company check is to go to ACRA’s online directory. The directory is free to use and you can find it on ACRA’s official website.
From there, enter the name of the company you’re verifying. Click on the submit tab and verify you’re not a bot. A simple CAPTCHA will pop up.
The fourth and last step is a little more complex. This is when you’ll need to have information on the company you’re verifying.
- To ensure the business is not using an incorrect or fictitious address, type in the company’s name, address, type of business, and the UEN (Unique Entity Number) number.
- Fill in the field requesting the current state of the company. Is it still in operation or has it closed its doors?
- The last day the company files its annual return and that of the fiscal year. This is when you’ll need copies of the company’s financial statements. You should already have this information as part of the introductory business arrangement.
- The company’s compliance history and rating.
- Dates on which financial statements are filed. However there are exception. You don’t need to enter information regarding solvent exempt private companies, dormant exempt private companies (to meet this standard, the company must be dormant since the date of its incorporation). Check the dates carefully when you get to this field.
Other exceptions for the financial statements section are sole proprietorships and Partnerships and Limited Liability Partnerships.
Ensure You Have the Company’s Crucial Information
Chances are you’re inundated with information concerning the company. You aren’t going to need all of the details, but some information is vital in a Singapore company check.
You must have a legitimate address for the company. You’ll also want to go carefully over the business’s annual returns. The Singapore Companies Act requires all companies to file an annual report with ACRA within 30 days of its annual shareholders’ meeting.
The annual general meeting of the company is mandatory once a year. Check the date on the annual general meeting paperwork. The dates should be around one year apart. However, if you’re verifying a private company they may be exempt from annual general meetings. Instead, they provide shareholders with financial statements within five months of the start of the new fiscal year. The statements pertain to the previous fiscal year and must be delivered to shareholders within the five month period.
The company’s financial statements are the other vital piece of information you need from the company.
Failure to meet these statutes is often a red flag and can indicate illegal activity.
