Before you sign: checking a Singapore target’s records, accounts and tax

When you buy a Singapore company, you inherit its records and its tax history. If the target’s share register is wrong, you may not be buying what you think you are buying. If its tax filings are behind, the liability becomes yours.

Legal due diligence on contracts and IP gets most of the attention. Two quicker reviews often get skipped: the target’s company secretarial records, and its accounts and tax position. Both can be done in one to two weeks, and what they find feeds straight into the price and the sale agreement’s warranties. If you are paying partly in your own shares, see also our guide to paying for an acquisition with shares.

Company secretarial review

This review confirms that the shares you are buying were validly issued and that the company is in good standing. We check:

• The constitution, including any restrictions on share transfers.
• Statutory registers: members, directors, secretaries, auditors and registrable controllers, including nominee disclosures.
• Share issuance history: every return of allotment, share certificates, and whether past share transfers were stamped.
• Options, convertibles and share commitments, such as ESOP grants, convertible notes or SAFEs that could convert into shares.
• Resolutions and minutes, to confirm past share issues and major decisions were properly approved.
• Filing compliance: AGMs, annual returns and financial statements filed on time.
• Registered charges over the company’s assets.
• Any ACRA late filings or compliance notices.

Common findings are small: a missing board resolution, an unstamped old transfer, a register that doesn’t match ACRA. They are easy to fix before completion and much harder to fix after.

Accounting and taxation review

This review confirms that the target’s books and tax position are as the sellers represent. It is not a full financial due diligence exercise, but it covers what most buyers of a smaller company need:

• Financial statements and management accounts, including how revenue is recognised and how reliable the reported earnings are.
• Net assets, working capital, and debt or debt-like items. Net asset value also sets the floor for stamp duty on the share transfer.
• Corporate tax filings and open years, and any likely exposures.
• Unutilised tax losses and capital allowances, and whether they can survive the change of ownership.
• GST registration and filings.
• Payroll and CPF compliance.
• Government grants or incentives, and whether a change of ownership triggers repayment or needs consent.
• Related-party balances and transactions, which often need settling before completion.

The findings feed into the price, the warranties and indemnities in the sale agreement, and later the purchase price allocation for the audit. The same work also gives an independent valuer most of the information they need.

Tax points that catch buyers out

Tax losses may be lost. A company can carry forward unutilised tax losses and capital allowances only if its shareholders stay substantially the same, meaning at least 50% by value. IRAS looks through to the ultimate shareholders. A 100% acquisition fails this test.

IRAS can waive the test if the change in ownership was not made to obtain a tax benefit. For a genuine commercial acquisition, a waiver is normally available. The losses can then usually be used only against profits from the same business. A waiver is worth applying for if the losses are significant and the target expects to become profitable.

Group relief is different. Once the target is at least 75% owned by a Singapore group company, it can transfer current-year losses within the group. Losses brought forward from before the acquisition do not qualify.

The sellers’ position. Singapore generally does not tax capital gains. A corporate seller that has held at least 20% of the target for 24 months can rely on the Section 13W safe harbour for certainty. For the buyer, issuing its own shares as consideration has no Singapore tax consequence.

Grants with strings attached. Some government grants and incentives require repayment, or the funder’s consent, when ownership changes. Check the letters of offer before signing, so any clawback is priced into the deal.

A clean handover at completion

Most buyers want their own company secretary to take over the target, so the whole group runs on one compliance calendar. Plan the handover before completion:

• Resignation of the outgoing company secretary, with the new appointment lodged with ACRA.
• Statutory registers and minute books handed over in full.
• The Corppass administrator role transferred, so the new team can file with ACRA and IRAS.
• KYC on the target. Under the Corporate Service Providers Act 2024, the incoming company secretary must complete customer due diligence on the target and its beneficial owners before acting. Starting this during the reviews avoids a delay on completion day.
• A locally resident director. Every Singapore company must keep at least one. If the buyer’s directors are overseas, arrange this before the sellers’ directors resign.

For more on moving company secretaries, see switching your company secretary in Singapore.

How Futurebooks can help

Futurebooks works with venture-funded companies in Singapore as company secretary and accountant. For a buyer, we offer:

• a company secretarial review and an accounting and taxation review of the target, each with a short report you can share with your lawyers for the warranties;
• IRAS waiver applications to preserve the target’s tax losses, where worthwhile;
• an information pack for your independent valuer, and support with acquisition accounting for the audit; and
• from completion, company secretarial, bookkeeping, payroll, GST and tax services for the target, aligned to your group reporting.

This article is general information, not legal or tax advice. Based on the Companies Act 1967, the Corporate Service Providers Act 2024 and IRAS guidance as at November 2026.