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Discover Some Beneficial Accounting Options for Growing Startups

A startup needs care and nurturing in order to grow, much as a newborn does! If you’re interested in giving your startup the best “care and feeding”, you’ll greatly benefit from this quick guide. We’re going to share some beneficial accounting options for growing startups.

Using all of this advice will help you to ensure that you build a strong foundation for profitability and growth. Without our tips, you may be prone to accounting snafus which make it harder to run your business properly.

Are You Running a Sole Proprietorship?

If you’re going it alone, at the start or always, your needs in terms of accounting will be dramatically different, versus what a bigger company would typically require. However, you should know that even sole proprietorships will benefit from accurate and regular accounting. In some cases, it’s best to hire an accountant before your launch. Another option is buying your own cutting-edge, easy-to-use accounting software.

If you don’t want the expense of paying an accountant to do the books for you, the fact that you’re running a sole proprietorship will be to your advantage, as you’ll find it easy to do your own books via an affordable software program, such as Peachtree, Xero or QuickBooks.

You should have the program in place as soon as you start making money. It’s probably not necessary to buy it before hand, as a typical program of this type will be intuitive and user-friendly. In other words, it will have a short learning curve, so you won’t need to spend ages learning how to use it before you put it to work for your new business.

As a sole proprietor, you’ll need to file Form 1040 at tax time and affix Schedule C. A good accounting software program will help you to track all of the right metrics, including expenses and sales, even in the earliest stages of operating your business. It will give you the power to stay organized daily and to make smart decisions as a business person.

Since you’ll know outgoing expense amounts and incoming earnings, you’ll be able to do what’s best for your business, day in and day out, without wondering what’s affordable for your new company.

As well, we recommend choosing a great tax return software program, such as Intuit. This is just one respected tax program, but it’s a solid pick. It includes all of the right features for sole proprietors.

If you do decide to hire an accountant, you’ll be able to put your accounting tasks in his or her hands and focus on other important aspects of running your business. As well, you may find that you’re able to access helpful advice whenever you need it.

What Will An Accountant Offer?

A good accountant will keep your books according to government rules and regulations, as well as accounting “best practices”. As well, an accountant will likely know the ins and outs of running small businesses, from a financial standpoint, and he or she will be able to assist you with making good decisions, whether you need to get a loan, set up an estate or take care of anything else in that vein.

If your business is very simple. an accountant’s advice may not be that important. It really depends on how simple or complex your operation will be.

The best advice is to focus on growing a loyal customer base for your new business, before you hire an accountant. Start making money and then go from there.

Role and Responsibilities of a Singapore Company Director

The main responsibility of every director is to make the company successful and to legally operate with it. If the laws are not respected within the company, the first person who bears all the responsibility is the director of the company. As you can assume, the essential role of the director is the status of a legal representative. The legal representative is actually an agent who has the obligation to work according to the laws of the country of Singapore. Those who not respect those laws will face serious consequence which can lead to termination of the existence of the company. As a legal representative, the director will work in the name of the whole company.

The number of directors in one company
It should be noted that every company can have one or more directors. The number of directors is usually determined by a decision on a general meeting. If the number of directors is not determined, the company will have only one director. There are companies that limit the mandate of the director and they have all the right to find a replacement after they made a decision on a general meeting.

Main responsibility of the director of a company
The main and probably the most important responsibility of a Singapore company director is the duty to represent the company in accordance with the memorandum of association, the decision of the company and the instructions of the supervisory board. This means that the director manages the company’s business in accordance with the decisions of the company following the instructions given by the supervisors. If the director is unable to take the intended action, the supervisory board will schedule a meeting and they will suggest another person and replace the current director. The director is never allowed to act independently. This will only lead the company to failure. The director and all the supervisors should communicate on a daily basis and discuss the steps they need to take to achieve the business goals. The achievements of the company should always be their top priority.

Compensation and salaries
Every Singapore company director who performs an impeccable work is entitled to a compensation for the work he/ she performs and most of them are entitled to receiving bonuses according to the work they did. According to the laws of the country of Singapore, the company has all the right to determine the method of calculation of the salary. The amount of money may depend on the business results of the company. Most companies offer a contract to their directors with a salary that was previously discussed and agreed. But there are cases when the director is a family member and he/ she performs their job without a compensation. This contract can be arranged too, and in such situation when the director agrees not to receive a salary, it means that they will share the profit with the owner of the company unless the director is also an owner of the company.

Company Striking Off Services

A company in Singapore can go for strike-off because of different reasons. Such a thing can happen all the time. Companies are constantly registered, while others are close to liquidation: this is the way the business world functions, as some businesses may work and others may not. Many times liquidation is inevitable, but it is important to strike-off a company with minimal procedural requirements.

There is one problem with the liquidation of a firm: the business must be eligible for strike-off, otherwise the procedure is not possible. In order to be eligible, a company must meet the requirements declared by the Accounting and Corporate Regulatory Authority Singapore, also known as ACRA. These are the requirements that must be met:

A final set of audited accounts has to be sent. The involved firm can begin the preparation of accounts and documents that are required for liquidation if all the requirements are met. The documents submission can depend on the company’s transaction.

In the case in which there were no transactions performed by the company after the date of incorporation, or there was no filing for audited accounts, then there is no need for submission of any audited accounts. Any existing bank account of the firm has to be closed though. The proof of the closure procedure has to be provided and a bank statement should be enough. The following documents are needed in a strike-off procedure for a company in Singapore, according to ACRA:

  • Declaration of Strike Off

  • Application for Strike Off

  • Tax Clearance

  • if applicable, Waiver of Form C-S/C

For firms that have already filed audited accounts before, the strike-off documents will have to be sent with a copy of the most recent audited report. In the case in which transactions were made, companies need to make sure that the audited accounts do not contain any assets or liabilities. For cases in which no liabilities and assets have been found in the accounts, a copy of the certificate of exempt private company is needed. The exempt has to be for the last Annual Return, but the most recent audited report should not be considered.

If there are liabilities or assets related to the account, directors have to offer an explanation and proof of how these liabilities and assets are disposed off. Also, the firm has to close the final set of audited accounts during the application. The submission of documents can be made on the Internet, using Bizfile, but all the necessary documents must be included. The document approval phase lasts between one week and two weeks and the approval of the documents is the responsibility of ACRA.

After approval, the company and IRAS will get a striking-off notice and anyone who wants to object against the liquidation should do it at this moment. In the case in which there are no objections, a second notice is issued, along with the date of strike-off. Sometimes, applications are not approved, case in which firms get a notification of this fact through email.

An application usually gets rejected because outstanding assets or liabilities are found. But, firms can submit documentation again, as the Accounting and Corporate Regulatory Authority Singapore will reconsider the application. The total duration of a striking-off procedure is of about six months.

Anyone who starts a business in Singapore or anywhere in the world must be aware that a strike-off procedure can be necessary in case the business fails. Some people start well, but their plans can fail in the long term. If you fail once, perform a strike-off procedure and then reconsider the business, maybe joining a partnership could bring success. In any of these cases, you have to know the steps and requirements of a strike-off process.