06 January 2025
Editor: ET
In the dynamic business landscape of Singapore, companies often seek financing to fuel growth and operations. A common method to secure such financing is by offering a charge over company assets.
Further Reading: 2025 Accounting Trends Every Singapore Business Should Know
Understanding the process and significance of registering a charge is crucial for businesses to maintain compliance and protect their interests.
What is a Charge?
A charge is a form of security interest that a company grants to a lender or creditor (the "chargee") to secure the repayment of a loan or the fulfillment of an obligation. This security interest can be over various assets, including property, equipment, or intellectual property.
Why Register a Charge?
Registering a charge is a mandatory requirement under Singapore's Companies Act. Failure to register a charge within the stipulated timeframe can lead to the charge being void against the company's liquidator or other creditors. Additionally, non-compliance may result in penalties, including fines of up to SGD 1,000.
Who Must Register?
All Singapore-registered local and foreign companies are required to register charges. This includes entities incorporated under the Companies Act and Variable Capital Companies (VCCs).
When to Register?
A charge must be registered within 30 days of its creation. For charges created outside Singapore, the registration must occur within 37 days from the date of creation. If this period is exceeded, a court order is required to extend the registration deadline.
How to Register a Charge?
To register a charge, companies can engage the services of a registered filing agent, such as a law firm, accounting firm, or corporate secretarial firm. Alternatively, company officers or directors can submit the registration through ACRA's BizFile+ portal using their CorpPass. The registration fee is SGD 60.
Key Considerations:
Documentation: Ensure all necessary documents, including the charge instrument and details of the secured assets, are accurately prepared and submitted.
Timeliness: Adhering to the 30-day registration requirement is essential to avoid penalties and ensure the charge is enforceable.
Record-Keeping: Maintain a comprehensive register of charges within the company, detailing the creditor's name, loan amount, repayment terms, secured assets, and satisfaction dates.
Further Reading: Essential Year-End Accounting Tips for Singapore Businesses
Registering a charge is a critical process for companies in Singapore seeking to secure financing. By understanding the requirements and adhering to the registration procedures, businesses can protect their interests and maintain compliance with regulatory standards.
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