Find answers and get support
In Singapore, having a corporate shareholder does not automatically disqualify a company from audit exemption. Eligibility depends on whether the company still qualifies as a small company or a small group under the Companies Act (Section 205C).
Audit Exemption for a “Small Company”
A private limited company is exempted from audit if it qualifies as a small company for the financial year in question. A company qualifies if it meets at least 2 out of the following 3 criteria:
• Total annual revenue: ≤ SGD 10 million
• Total assets: ≤ SGD 10 million
• Number of employees: ≤ 50
Note: The company must also be a private company (not a public one).
If there’s a Corporate Shareholder
Having a corporate shareholder does not automatically remove the exemption, but you must determine if the company is part of a group. If the company is part of a group, then the entire group must qualify as a small group to enjoy audit exemption.
What is a “Small Group”?
A small group is one where the consolidated group meets at least 2 of the 3 quantitative criteria mentioned above (revenue, assets, employees) on a consolidated basis. As long as the group as a whole is “small” and the company remains private, the audit exemption applies.
When Audit Becomes Mandatory
Audit is required if:
- The company (or group) exceeds the small-company or small-group thresholds.
- The company is dormant but previously held significant assets or has not filed dormant declarations properly.
- The company is public or limited by guarantee.
Foreign Corporate Shareholders
The Singapore company’s audit exemption depends on its group status—regardless of where the parent is incorporated. Under Section 205C, a company is part of a group if it has a parent or subsidiary, even if that group is foreign.
| Scenario | Audit Exemption Status |
|---|---|
| Foreign parent exists, no other subsidiaries, and no consolidation prepared. | Can be audit-exempt |
| Foreign parent prepares consolidated financials, and the group exceeds thresholds. | Audit required |
| Foreign parent is dormant or holds only one Singapore subsidiary. | Likely audit-exempt |
Practical Examples
Example 1: Audit-Exempt
ABC Pte. Ltd. (Singapore) is 40% owned by XYZ Holdings (Corporate). ABC has S$5M revenue and 20 employees. XYZ Holdings is dormant.
Result: Group remains small. Audit exemption applies.
Example 2: Audit Required
DEF Pte. Ltd. (Singapore) is 100% owned by BigGroup Holdings (Foreign). DEF itself is small (S$2M revenue, 10 employees), but BigGroup consolidates global subsidiaries with S$80M revenue.
Result: Group exceeds thresholds. Audit is required.
Summary of Conditions
| Condition | Audit Exempt? |
| Small company + small group | Yes |
| Small company + large group | No |
| Public company | No |
| Dormant company (No significant transactions) | Yes |
Regulatory Source: ACRA – Audit Exemption for Small Companies.
Share this article:
