As per the Singapore Companies Act, all private limited companies in Singapore need to prepare their financial statements annually and have them audited before filing with ACRA.

However, if the private limited company fulfils certain conditions set out under the Small Company Concept as legislated in 2015, the company can be exempted from having its accounts audited.

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To be qualified as a small company, the private limited company must:

  1. Be a private company in the financial year in question; and
  2. Meet at least 2 of 3 following conditions for the immediate past 2 consecutive financial years:
    1. Total annual revenue not more than S$10 million.
    2. Total assets not more than S$10 million.
    3. Number of employees not more than 50.

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If the company is part of a group (i.e. holding company or subsidiary company), in order to quality for audit exemption,

  1. The company must qualify as a small company; and
  2. The entire group must be a “small group”.

To be a small group, it must satisfy 2 of the 3 quantitative conditions on a consolidated basis for the immediate past 2 consecutive financial years. If the group consists of a total of 5 companies, all 5 companies will be exempted from audit if they satisfy the required conditions.

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Once the small company is no longer a private company at any time during a financial year or does not meet 2 of the 3 quantitative conditions for the immediate past 2 consecutive financial years, it will be disqualified. As a result, auditing of the financial statements will be required of the company.

Do note that exemption from audit do not mean exemption from filing annual accounts. The company will still be required to prepare and file their unaudited annual financial statements.

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