A director of a VCC incorporated under the Variable Capital Companies (VCC) Act, has to comply with a number of statutory obligations under the Act. The following are examples of the statutory obligations which ACRA takes enforcement action against.
Holding of Annual General Meeting (AGM)
Section 77 of the VCC Act requires the company to hold an Annual General Meeting (AGM). A general meeting of every VCC called the “annual general meeting” must, in addition to any other meeting, be held after the end of each financial year within 6 months. If default is made in holding an annual general meeting, the VCC and every officer of the VCC who is in default shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $5,000, and also to a default penalty.
Section 78 sets out the criteria where VCCs need not hold an AGM:
- The directors of the VCC have given written notice to the VCC’s members, at least 60 days before the last date on which a VCC must hold an AGM, that an AGM for the financial year will not be held; or
- The VCC has sent to all persons entitled to receive notice of AGM a copy of the audited financial statements or (in the case of a VCC that is a parent company) of the audited consolidated financial statements and balance sheet. These documents must be accompanied by a copy of the auditor’s report on them. The documents mentioned must be sent not more than 5 months after FYE if the VCC has given notice that an AGM will not be held. Otherwise, these documents must be sent not less than 14 days before the start of the meeting.
Filing of Annual Returns (AR)
Section 97 of the VCC Act requires a VCC to lodge an Annual Returns (AR) within 7 months after the end of its financial year.
The AR is an electronic form lodged with ACRA through its VCC Registration and Filing Portal and contains important particulars of the VCC such as the name of the directors, its members, and the date to which the financial statements of the VCC are made up to. The AR provides critical information that helps the VCC’s stakeholders to make informed decisions.
Under Section 97 (1) Every VCC must lodge a return with the Registrar after its annual general meeting and within 7 months after the end of its financial year. If a VCC fails to comply with this section, the VCC and every officer of the VCC who is in default shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $5,000, and also to a default penalty.
Updating of Registered office, office hours, and publication of name and registration number
Section 45 of the VCC Act states that sections 142, 143 and 144 of the Companies Act apply in relation to a VCC or proposed VCC
(as the case may be) as they apply in relation to a company or proposed company. Hence;
- The VCC upon the date of its incorporation shall have a registered office within Singapore to which all communications and notices may be addressed and which shall be open and accessible to the public for not less than 3 hours during ordinary business hours on each business day. Failing which, the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty.
- Any subsequent change in the address of the registered office shall be lodged with the Registrar within 14 days after any such change. Failing which, the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty
- The name and registration number shall appear in legible romanised letters on all business letters, statements of account, invoices, official notices and publications of or purporting to be issued or signed by or on behalf of the company.
Providing information
Section 72 of the VCC Act states that section 173A of the Companies Act applies in relation to a VCC as it applies in relation to a company.
A VCC shall by notice furnish to the Registrar within 14 days after a person becomes or ceases to become a director, manager, secretary or auditor. Failing which, the company and every officer of the company who is in default shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $5,000 and also to a default penalty.