Different Business Entities and Structures in Singapore

Singapore Company Formation by a1 business

Different Business Entities and Structures in Singapore

Of the many choices when deciding on incorporating an entity in Singapore, one of the major factors is the type of business structure (i.e. legal entity) you select for your business. The decision you make will affect the amount of taxes you pay, the image and perception of your business among your customers and suppliers, the amount of paperwork that your business will have to do, the personal liability you will face, the amount of money you can borrow and the expansion of the business. This guide will allow you to have an overview of the different business entities and structures in Singapore and any differences among them. All of them are subjected to many different regulatory and tax regimes that reflects their organisation and ownership.

The following are the main business entity types in Singapore:

Private Limited Company

A private limited company is a LLC whereby the shares are held by less than 50 persons and will not be available to public. Mostly private incorporated businesses in Singapore are registered as private limited companies. A private limited company’s name in Singapore will usually end with Private Limited or Pte Ltd. For example, our own company A.1 Business Pte Ltd is incorporated as a private limited company. The shareholders of a private limited company will have to be corporate entities, individuals or both.

A private limited company will be the most advanced, flexible, and scalable type of business form in Singapore. For serious entrepreneurs, it is the most preferred type of Singapore business entity (as opposed to sole proprietorship or limited liability partnership). If you are interested in incorporating a private limited companies, refer to Singapore company registration

Why entrepreneurs prefer Private Limited Company

Separate Legal Entity: A private limited company will have its own legal identity and it is separated from its shareholders and its directors. It allows the acquisition of assets, enter into debts, enter into contracts, sue or be sued in its own name.
Limited Liability: The amount of capital they each agreed to contribute as capital into the company will be the limited liability of the members to contribute to the debts of the company.
Perpetual Succession: The continued membership of any of its members will not determine the company’s existence. In the event of death, resignation, or insolvency of shareholders or directors, ease of transfer of shares or changes in shareholders will ensure the company to survive
Ease of raising capital: If the company plans for expansion or to bring in new shareholders or to issue more shares to existing shareholders, you will need to raise capital. If a company has separation between personal and business assets, investors will be more likely to purchase shares in that company. Also, limited companies are able to get a loan easier from most banks.
Credible Image: As compared to a sole proprietorship or a partnership firm, an incorporated business entity will exhibit a better image and investors will be more willing to become a part of the company as it demonstrates a vision to grow and expand. Being a private limited company means that potential clients, suppliers, bankers and other professionals will take your business more seriously.
Ease of transfer of Ownership: Without disrupting operations or the need for complicated legal documentation, ownership of a company may be transferred, either wholly or partially. By selling all or part of its total shares, or through issuing of new shares to additional investors, ownership transfer will be done.
Tax Benefits and Incentives: A private limited company is a very efficient tax entity in Singapore as the effective corporate tax rate for Singapore companies for profits above SGD 300,000 it is capped at 17% while profits up to SGD 300,000 is below 9%. Moreover, there is no capital gains tax. A single-tier tax policy is used in Singapore which means that once the income has been taxed at the corporate level, dividends can be distributed to shareholders tax free.

Public Limited Company

A public limited company is a LLC that may offer its shares to public. A public limited company must have at least 50 shareholders and is subjected to significantly stricter rules and regulations since they have the power to raise funds from the public. Public limited company will be seen listed on a stock exchange. Public limited companies are outside the scope of this article as they are meant for large businesses.

Public Company Limited by Guarantee

If you are setting up a business entity meant for non-profit purposes, a public company limited by guarantee is the preferred choice. To learn more about it, refer to setting up a non-profit entity in Singapore.

Foreign Company Registration Options

Foreign companies that would wish to setup a presence in Singapore, have the choice of setting up a subsidiary company, branch office, or a representative office in Singapore.

Subsidiary Company. A subsidiary company will have the parent company as its shareholder and it is a private limited company incorporated in Singapore. For small to medium-sized foreign businesses, setting up a subsidiary company would be the most preferred choice in Singapore.
Branch Office. A branch office does not act as a separated incorporated entity and it is an extension of its parent company and Liabilities of a branch office will extend to its parent company.
Representative Office. Setting up a representative office in Singapore is a temporary arrangement for conducting marketing research activities. It cannot be engaged in any profit yielding activities and does not have any legal status.

For further details about these choices, refer to foreign company registration options in Singapore.

Sole Proprietorship

The simplest but the riskiest type of business form in Singapore would be sole proprietorship. From the legal perspective, the owner and business are counted as one. The owner owns all the assets and liabilities of the business. There is no protection of the owner’s personal assets from the business. Creditors have the rights to go after the owner’s personal assets if the business cannot pay all its liabilities, it is known as unlimited liability. Many entrepreneurs are unfamiliar about this financial risk. The owner will take full responsibility for the business’s liabilities. Inspiring entrepreneurs should not consider a sole proprietorship.

Other details about sole proprietorship can be found at Singapore sole proprietorship registration guide.

Partnership

To address the constraint faced by a sole proprietorship, the partnership type of business structure allows two or more people to setup and co-own a business. The firm does not have any legal existence separate from its partners. It will come to an end with death, insolvency, incapacity or the retirement of any partner. Furthermore at any point in time that any of the partners are unsatisfied or discontent, they can also give notice for the dissolution of the partnership. In a limited number of situations a partnership type of business structure is favourable. It is not recommended for this type of business structure to business owners.

General Partnership

An unattractive way to structure a business in Singapore would be a general partnership. As partners are personally liable for the debts and liabilities of the business and each partner are still able to be held responsible for the actions of another partner.

Limited Partnership

In Singapore, limited partnership is an alternative to the general partnership type of business form. In addition to a general partner, it must also have a limited partner. The amount of investments by the partners will be the limited liabilities that they are accountable for. However, they are unable to participate in the management of the business. Limited partnership is an unattractive vehicle for setting up a business in general.

Limited Liability Partnership (LLP)

Among all the three types of partnership, LLP is the most advanced and newest business incorporation structure. It combines all the features of partnerships and companies. LLP was introduced in 2005 through the enactment of Limited Liability Partnership Act. LLP provides owners the flexibility of operating like partnership while enjoying many benefits that comes with a corporate body like a private limited company.

A LLP is mainly meant for carrying a profession where two or more professionals would like to setup a joint practice in a common field. It is a must for the owners to enter into detailed agreements about how the profits and management responsibilities are divided. It can get very complex and would require the services of a lawyer to draw up the agreement. Partners in a limited liability partnership have to be responsible and proactive for cultivating for their own clients based on the partner’s specific area of focus.
The minimum amount of partners that a LLP must have is two partners at all times. An LLP is not suited for a business that carries a trade. For more information on LLP, refer to Singapore LLP registration guide

Which business entity type to choose?

Depending on your particular situation and plans, you need to decide the right business structure to incorporate in Singapore. As a general rule, you can use the following guidelines to make your decision:

If you are a local and would like to register a small business and you will be the only owner and the nature of your products/service will not carry liability issues, it might be easier for you to start up your business as a Sole Proprietorship. However, you must carefully consider the fact that in case of any business liabilities, the claimants will be able to go after your personal assets.
If your business involves providing services by way of the profession you hold and you have one or more additional partners in a similar profession and would like to build a joint practice, setting up a LLP will be a suitable business structure for you.
In conclusion, incorporating a private limited company in Singapore would be the best choice. Although it is more complicated, it is still the best structure in the long run.

discerning-reliable-corporate-secretarial-services-5-steps

18 Aug

Discerning Reliable Corporate Secretarial Services In 5 Steps

Corporate Secretary by a1 business

Hiring the right source for corporate secretarial services can potentially bring you a lot of benefits compared to going through the trouble of interviewing and hiring on your own, since the corporate secretary appointed by them are often experienced professionals that are well equipped to meet all requirements. However, certain care has to be taken to ensure that you are hiring reliable corporate secretarial services as well. Here are 5 steps to undertake:

1. Reliability

Check for reliability from both the service provider and the appointed corporate secretary. Sources providing the right corporate secretarial services should consistently display reliability by having the experience needed to fulfill requirements set by ACRA. The appointed corporate secretary they provide should be able to facilitate your corporation’s business processes by ensuring that all required processes and preparation, like annual filing, are done in a timely error-free manner.

2. Experience/Advice

A reliable source that provides corporate secretarial services should also be equipped with the experience and knowledge required to assist your corporation. Corporate secretaries should be able to offer sound advice as well as assist in areas like striking off, corporate procedures, business structures, employment pass applications, statutory record register maintenance and more!

3. Support

Good corporate secretarial services also come in the form of support for corporations. The appointed corporate secretary should own strong organisation skills and can be trusted to work independently, as well as manage deadlines. Ideally, a good corporate secretary should display strong interpersonal skills, in terms of both verbal and written communication.

4. Accuracy

The corporate secretary should also be able to coordinate and organise meetings for Directors and Shareholders. Discussions and resolutions should be recorded clearly into notes for future reference. Corporate secretaries should possess the experience needed to keep board meetings concise and cohesive by distributing board meeting agendas and communicating expectations. In addition, the minutes prepared should also be concise and accurately reflect the contents of the meeting, with no risk of embellishment or misinterpretation.

5. Consistency

Consistency in effort and quality of corporate secretarial services that are provided can also be crucial criterias when it comes to discerning the right corporate secretarial service provider for your corporation. A recommended practise would be to allow for a trial period of at least three months so that you can gauge the effectiveness and contribution the appointed corporate secretary is making.

ensure-corporate-secretarial-service-compliance

11 Aug

How To: Ensure Corporate Secretarial Service Compliance

Corporate Secretary by a1 business

With the plethora of corporate secretarial service providers and experienced professionals out there, the process of hiring one can be attained smoothly. However, the hiring process should not simply stop there. Business owners are advised to monitor the corporate secretary’s performance, in order to ensure that they are experienced enough to be able to accurately meet all legal requirements. Here’s how one can ensure corporate secretarial service compliance:

Basics

A staple requirement when it comes to providing corporate secretarial service, would be a proficiency in interpersonal skills, regardless of whether it’s written or verbal. Take a look at the way your corporate secretary conducts themselves- are they meticulous in the work they do? Are they able to conduct procedures independently and manage deadlines? Are they able to build up a good rapport with your shareholders and understand the structure of your corporation clearly?

Regulatory Services

Part of the corporate secretary’s responsibilities when it comes to providing corporate secretarial service to clients would be monitoring regulatory compliance. Your appointed corporate secretary should be able to ensure compliance by regularly maintaining statutory registers and records, reporting relevant statutory authorities in situations of changes in corporate structure or membership exchange, effectively prepare board resolutions, effectively prepare shareholders’ resolutions as well as record minutes in clear concise formats during board meetings. In addition, the corporate secretary should also be able to assist in company restructuring or cessation.

Keep an eye out on the corporate secretary’s performance by monitoring the quality of their preparation as well as their ability to pinpoint what has to be done when said situations occur.

Corporate Governance Services

Another corporate secretarial service corporate secretaries should be able to successfully cater to would be assisting processes that are related to corporate governance. These includes dispensing expert advice for corporation procedures, assisting with the development of company processes for corporate governance, assisting/advising on business registration or structure establishment, renewal or registration of representative offices, application for employment passes, and more!

Corporate secretaries should also be able to monitor the timely file returns with ACRA and draft routine resolutions on behalf of the corporation. The processes should be done without any errors so the business owner can focus on more pressing matters.

Quality corporate secretarial service is often represented with professionalism and quality in their work. A good corporate secretary should display a clear understanding of your business and continue to assists by offering valuable guidance in terms of your corporation’s governance or finance operations, as well as management process.

5-beneficial-practices-virtual-office-service-providers-present

9 Aug

5 Beneficial Practices Virtual Office Service Providers Present You With

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For start up corporations, entrepreneurs running on strict budgets and business owners who frequently travel, setting up a virtual office in singapore is perceived as one of the most beneficial decisions that could be arranged. If you are deliberating on if you should consider signing up with virtual office service providers, consider the 5 benefits they could offer your corporation:

1. Email Management

Virtual office service providers are capable of helping business owners with email management by checking and screening through their emails. Business owners will notice a reduced daily email load, since the virtual office service provider is capable of responding to certain relevant emails and flagging only the rest that requires the business owner’s personal attention. Professional virtual office service providers can also facilitate access by organising emails into manageable folders to keep business owners informed while building up their professional image.

2. Contact Management

Virtual office service providers are also willing to provide call forwarding services for business owners. Never miss an important call with the help of live receptionists answering professional calls and taking note of voicemails on your behalf. Your virtual office service providers can also help weed through unwanted calls so that only essential and converting ones are transferred/forwarded to you.

3. Timely Reminders

Stay on top of pressing business matters with the help of reminders and alerts sent by your virtual office service providers. Most professional virtual office service providers are happy to facilitate business owners with reminders and alerts for matters including billing, mail and other essential practices. This way, business owners will no longer have to worry about basic administration tasks and focus their efforts on their business progress.

4. Cost Saving

The cost of buying office spaces is a lot more expensive compared to making use of virtual office services. In addition, certain virtual office service providers are also able to provide temporary access to facilities that business owners could need, including meeting rooms, day offices, wireless connectivity and more! This allows business owners to save up their budget for other business processes that require attention while still being able to make use of essential business facilities whenever they need.

5. Mailing

For business owners who are unable to collect their mail/packages themselves, virtual office service providers are able to create convenience for them by opting to arrange for delivery. This is useful for business owners who are running on limited time or require frequent travelling. Business owners who are based in other countries can also opt to have their packages/mail delivered to them at additional prices.

self-hiring-corporate-secretarial-service-providers-better

4 Aug

Self Hiring or Corporate Secretarial Service Providers- Which Is Better

Corporate Secretary by a1 business

One question all business owners have considered at one point, would be the question of whether it’s more economically wise to invest in self hiring corporate secretaries, or to hire an external corporate secretarial service provider. The merits of both procedures are each compelling, but what would be better? Here are some factors to consider:

Skill Set

The skill set of a corporate secretary is important, regardless of whether you are self hiring corporate secretaries or making use of a corporate secretary service provider. By self hiring a corporate secretary, you will be required to detail and make a list of what requirements you wish to have them meet. This could be difficult if you are unsure of what exactly to look for. Whereas when it comes to making use of a corporate secretary service provider, the hassle of doing so is saved since these service providers are usually experienced and professional enough to appoint a corporate secretary that best fulfills general requirements.

Services Provided

Corporate secretaries are expected to be able to provide a wide range of services including: meeting compliance/reporting requirements, updating/filing with ACRA, statutory register maintenance, AGM document preparation, meeting minutes preparation, providing legal advice, assisting with procedures like restructuring/cessation and more. Depending on the corporate secretarial service provider you sign up with, certain service providers do not provide add on services beyond the basics. Whereas when you hire your own corporate secretary, they are expected to fulfill all requirements and provide the relevant services.

Hiring Process

The process of hiring a corporate secretarial service provider is often a lot more straightforward since the experienced service provider is more than willing to guide business owners through the process. However, since there is no stipulation from ACRA that all corporations have to hire corporate secretarial service providers, corporations can choose to self hire others as long as they qualify for the role of a corporate secretary.

When self hiring however, there are certain things to take note. Public companies are required to hire corporate secretaries that are registered filing agents. The corporate secretary will need to submit an application to ACRA to become a qualified individual before corporations can legally appoint them. Private corporations are able to appoint anyone with a valid SingPass as long as they are experienced and qualified.

Time

One of the clear benefits when it comes to self hiring a corporate secretary would be that companies can get more done in a shorter amount of time since everything is handled internally. Hiring a corporate secretarial service provider usually means you will have to take the time to liaise with the external firm, which can be quite time consuming if you have a lot of matters to address and clarify.

Costs

In terms of cost and expenses, self hiring a corporate secretary for your corporation can allow your corporation to save up on fees, since this could be counted on a salary basis. Whereas if your corporation decides to hire a corporate secretarial service provider, you will be prompted to pay either on an annual basis or on a monthly basis. There is also the factor to consider that there may be add on fees, if you require other services combined with what they provide.

Though a good recommendation to keep an eye out on would be when corporate secretarial services come up with different payment packages. Select the one closest to your needs and negotiate for add on services if there is a requirement, you may also find that certain corporations prefer sending you quotations or charge you upfront depending on their business practise. There are also some who regularly offer discounted rates for corporations if they fit certain requirements.

Ultimately, these are some of the factors you should be considering. Depending on what you prioritise, hiring a corporate secretarial service provider can actually be more beneficial instead. Whereas self hiring corporate secretaries come with their own set of advantages and disadvantages as well.

corporate-secretarial-service-tips-preparing-minutes-important-board-meetings

28 Jul

Corporate Secretarial Service Tips: Preparing Minutes For Important Board Meetings

Corporate Secretary by a1 business

When users sign up for corporate secretarial service, they usually come with certain expectations that the corporate secretary should fulfill. Apart from essential services, the preparation of minutes for important board meetings also lie within the responsibilities of the corporate secretary. Here are some corporate secretarial service tips for doing just so:

Essential Information Recording

Essential information that contributes to the structure of the discussion should be recorded by the corporate secretary. Some examples are the length of discussions that are important, deliberations, date of the meeting, start and end times, location, the attendees present, the presence/maintenance of a quorum, materials that are distributed, topics that are covered and decisions that have been made. Providing good corporate secretarial service also includes clearly identifying separate meetings and tasks, as notes/minutes are typically incomplete by nature.

Identification

The more organisation/structure the minutes prepared are, the easier a task to interpret/understand when studied. Corporate secretaries are recommended to make use of the particular meeting agenda to organise and label their minutes/notes. Transitions from different topics should be indicated in presentations by management, advisory firms, executive sessions and counsel.

Clear identification/description of the board meeting’s deliberative process should also be included. As an added corporate secretarial tip when it comes to preparing minutes: Collective or passive voice descriptions should be used to avoid attribution errors.

Accuracy

In certain situations, differing opinions from directors regarding discussed events can be resolved with reference to the corporate secretary’s notes some time in the future. Therefore, it is important to provide clarity and accuracy when preparing minutes. Meeting minutes that contain clear discernable objectives can reduce the possibility of misinterpretation, thereby lowering risks of said information being used by adversaries.

Consistency

Another good corporate secretarial service tip when preparing minutes is to keep the standard minute preparation format consistent. Make use of the same fonts, styles, formats, design elements, organisation of information, and other key elements that make up your entire note. Also bearing in mind local statutory requirements, it would be a good corporate secretarial service step to make sure that the statutory requirements specifically created for minutes have been met.

Distribution

After preparation, the corporate secretary should distribute their draft minutes to directors so that they can be

roles-responsibilities-corporate-secretarial-services-assist

21 Jul

Roles and Responsibilities Corporate Secretarial Services Assist With

Corporate Secretary by a1 business

When it comes to setting up a company in Singapore, business owners are bound by certain requirements stated by ACRA. The appointing of corporate secretaries within 6 months of the new company’s incorporation would be one such requirement. Business owners can either choose to hire a company secretary manually, or decide to appoint specific providers that offer corporate secretarial services in Singapore.

The appointed corporate secretary will be regarded as the corporation’s primary officer, and will be placed in charge of essential administrative/reporting legal requirements. To ensure that business owners are able to benefit fully from corporate secretarial services, it is highly recommended that they are acquainted with the roles and responsibilities a corporate secretary should fulfill:

Administrative

Considered as one of the primary features that corporate secretarial services in Singapore offer to business owners, the appointed company secretary is required to contribute efforts to essential administrative tasks that involve reporting confidential information. Business owners can expect corporate secretarial services to efficiently handle administrative tasks like the updating and filing of annual returns, updating of directors’ particulars and company officers (appointment, deaths, resignations), company constitution amendments, share allotment/transfers, company name registration or changes, maintenance of Statutory Registers, Signed Board resolution filing, AGM/EGM maintenance and more.

Advisory

Corporate secretarial services in Singapore can also extend to advisory responsibilities as well. Company secretaries should be professional enough to ensure that the corporation’s internal governance meets up with legal compliance frameworks and advise their clients accordingly. This way, key information can be used to formulate legal strategies and complement decision making, especially when it comes to company policies.

Fiduciary

Corporate secretaries are also trusted to act in the best interest of the corporations and to avoid disclosing potential interest conflicts. They hold the responsibility of keeping a close watch on proceedings since failure to do so can be regarded as breaking the law and potentially result in severe consequences for the corporation.

accounting-practise-preparing-balance-sheets

20 Jul

Accounting Practise: Preparing Balance Sheets

Accounting by a1 business

The preparation of balance sheets is one all accountants should master as an accounting practise, since this process is one that will require performing frequently. Balance sheets can be considered amongst one of the major financial statements that are produced after all. If you are beginning with basic accounting practise, here’s what you should know about the process:

Accounting balance sheets represent the financial position of a corporation at a specified end of a certain date- all transactions spanning through the set end date is recorded and reported. Accounting balance sheet information allows creditors to keep track of what the corporation currently owns, and what it still owes to other relevant parties. This is also the information required by bankers to gauge if the corporation qualifies for more credit or more loans. As basic accounting practise, focus on three important aspects in the overall formula used- Liabilities, the Owners’ Equity as well as Assets. The total amount of assets a corporation has is equivalent to the sum of both it’s liabilities and the Owners’ Equity.

Assets

Assets are resources the corporation acquires through the process of transactions. These resources typically own future economic value that allows accountants to measure and express through dollars. Assets can also include costs that are paid in advance but not expired, for example: Advertising services. Asset accounts typically contain debit balances, where contra assets contain credit balances.

Liabilities

Otherwise known as corporate obligations, these are currency owed to the company’s creditors for transactions. Liabilities are either treated as a contributing source of a corporation’s assets, or a claim against the corporation’s assets. They can also be the currency that is received in advance for future products or services. These liability accounts usually contain credit balances, whereas those with debit balances are referred to as contra liabilities.

Standard accounting practise allows corporations to term liabilities as commitments (where liabilities are only considered on balance sheets when the services/goods are received), potential liabilities ( product warranties, loan guarantees, lawsuits) and long-term liabilities ( loans that are paid through monthly payments over a period of time).

Owners’ Equity

The Owner’s Equity or Stockholder’s Equity is used when referring to the corporation’s book value, where the asset amounts reported are a sum between the equity as well as liability amounts. Depending on the nature of the corporation, different terms apply- sole proprietorships make use of the Owner’s Equity where Stockholder’s Equity is often used for corporations with multiple stockholders. Both accounts should normally carry credit balances.

An owner’s equity is typically represented with either two or three accounts on the accounting balance sheet. A stockholders’ equity however, would be represented in a section of the balance sheet through considerations like treasury stock, accumulated comprehensive income, paid in capital, and retained earnings. Revenues earned and gains typically increases the owner’s equity while expenses and losses causes it to decrease. For corporations performing services and increasing assets, the equity increases when the service revenue account is closed at the end of the year.

These are the accounting basics to keep in mind when preparing balance sheets. Different accounts contain different sectors to refer, doublecheck and report on. Make sure to pay attention to these details when preparing your balance sheets and use the notes or foot notes section of balance sheets to inform or address any additional information that facilitates better comprehension and analysing of the overall financial statement.

5-requirements-good-corporate-secretarial-services-meet

14 Jul

5 Requirements Good Corporate Secretarial Services Should Meet

Corporate Secretary by a1 business

Signing up for corporate secretarial services in Singapore is a fairly straightforward process due to the fact that corporations have plenty of service providers to choose from. Since the roles and responsibilities of a corporate secretary revolves around ensuring that the corporation meets essential legal obligations, it is imperative that business owners pick the best corporate secretarial services they could get. Here are 54 basic requires good corporate secretarial service providers should meet:

1. Transparency

While it is true that signing up for corporate secretarial services in Singapore enables business owners with the ability to draw focus on more business progress, it is still prudent to understand what the corporate secretarial service provider plans on accomplishing/setting into motion. A good service provider should provide updates on the procedures they are working on with full transparency so the business owner is aware of all background processes.

2. Solid Foundation Of Knowledge

A good corporate secretarial service provider should retain a wealth of knowledge when it comes to regulations, compliance laws and requirements that are essential. They should be able to effectively advise and monitor the corporation’s progress, especially when it comes to keeping corporation policies within the realm of feasibility. This way, business owners can progress with future plans and tasks with full confidence in knowing that they still meet regulations set by ACRA, thereby eliminating possibilities of facing repercussions.

3. Quality

Another requirement good corporate secretarial service providers should be able to meet would be to effectively and accurately perform essential legal procedures like filing returns and other assorted administrative tasks on behalf of their client. Qualified service providers are able to facilitate such procedures with minimal fuss and maximum effectiveness, so business owners can be rest assured in their professionalism. This is also one of the most important requirements since failure to accurately perform certain legal procedures can potentially cause the corporation to suffer serious repercussions.

4. Communication

Strong communication skills are another good requirement corporate secretarial service providers should exhibit. Since corporate secretarial duties rely on keeping organised with both internal as well as external stakeholders, directors and company officers, the appointed corporate secretary should be well versed enough to effectively negotiate, communicate and facilitate meetings with concise reports.

5. Reliability

Appointed corporate secretaries usually own access to the business owner’s company history, the structure of the corporation, shareholders and directors’ information as other sensitive data. Clients should be able to trust that the corporate secretary can conduct tasks in a tactful, consistent and reliable manner.

13 Jul

All To Know About Preparing Cash Flow Statements

Accounting by a1 business

Another part of accounting basics that all accountants should take care to remember would be the procedure of cash flow statement preparation. If you are a beginner with accounting basics, here are some things to be acquainted to:

A comprehensive cash flow statement should involve the cash that was generated/used in operating, investing, supplemental information as well as financing activities. As a standard accounting practise, each different sector can be reported with emphasis on different formats since their focus will be on different factors. All accountants are advised to carefully monitor the corporation’s activities so as to accurately prepare their cash flow statements.

One of the general accounting basics often observed and practised in cash flow statement preparation would be inventory purchase when it comes to displaying changes in operational activities of a corporation. For example, if a corporation invests in the purchase of inventory stock, accountants should make note of the cash decrease in the cash flow statements under operational activities. However, this should not affect the profit or loss, since the corporation technically would not have sales or expenses.

This decrease is noted as inventory is increased. Pay attention to the financing activities section, if any personal investment has been made before the purchase of inventory. The financing activities section should match up with the increase in overall investment increase. Make sure net change of the investment and the cash outflow regarding inventory be subsequently verified in the balance sheets.

Another accounting practise often relied on would be the calculation of revenue and expenses. Presuming that the corporation sold products or services to a customer and issued an invoice that has been paid- Accounting basics dictate that the revenue is only recognised during the time of delivery for products/services and not when the payment is received. The expenditure of the corporation appears in the cash flow income statement when they match up with the corporation’s revenue and not when the products/services are paid.

For corporations who require dealing with supplies, the supplies expenses account only reflects changes when the supplies are used. Standard accounting basics reveal that whatever cost the supply order displays will be recorded on the balance sheet under asset account supplies. If payment has yet to be made, liabilities are recorded under the accounts payable section.

If there are depreciation expenses, another good accounting practise worth noting would be that there will be situations where the amount will require to be added back to the net income. The situations that fit into this category of treatment would be when there is no cash spent and yet the depreciation expense account entry results in net loss. In order to convert the income statement’s bottom line into the cash used in operating activities or other relevant areas, accountants will need to add back or remove the depreciation expense.

13 Jul

All To Know About Preparing Cash Flow Statements

Accounting by a1 business