Many Singapore company owners have heard the phrase “exempt private company” on their ACRA business profile without ever knowing what it means or why it can save them time and money. An exempt private company — or EPC — is a specific status under the Companies Act 1967 that carries real, practical advantages: lighter filing obligations and, in some cases, the freedom to lend money to directors that ordinary companies cannot.
This guide explains what an EPC is, how the status is determined, the concrete benefits it unlocks, and how to keep it. If you run a small, closely held Singapore private limited company, there is a good chance you already are an EPC — and understanding it properly will help you file correctly at each annual cycle.
What is an exempt private company?
The definition sits in section 4 of the Companies Act 1967. An exempt private company is a private company:
(a) in which no beneficial interest in its shares is held directly or indirectly by any corporation, and which has not more than 20 members; or
(b) which is a company wholly owned by the Government and which the Minister has declared in the Gazette to be an exempt private company.
In everyday terms, the ordinary EPC is a private company with 20 or fewer shareholders where every shareholder is a natural person. The moment a corporation holds shares — even a single share, and even indirectly through a nominee — the company ceases to be an EPC. This is the single most common reason a growing company loses EPC status: it takes on a corporate investor or restructures under a holding company.
EPC compared with other company types
| Feature | Exempt Private Company | Ordinary Private Company | Public Company |
|---|---|---|---|
| Maximum members | 20 (all individuals) | 50 | No limit |
| Corporate shareholders | Not permitted | Permitted | Permitted |
| File financial statements with ACRA | Not required if solvent | Required | Required |
| Loans to directors (s162) | Exempt from the prohibition | Prohibited (with exceptions) | Prohibited (with exceptions) |
Benefit 1: the solvent EPC filing exemption
The best-known advantage is that a solvent EPC does not have to file its financial statements with ACRA. When it lodges its annual return, it instead files an online declaration that the company is able to meet its liabilities as and when they fall due — a declaration of solvency — signed by a director and the company secretary.
This matters for privacy as much as convenience. Because the accounts are not filed, they do not become part of the public record that anyone can purchase from ACRA. Note that this is a filing exemption only: the company must still prepare proper financial statements that comply with the Singapore Financial Reporting Standards and present them to shareholders. If the EPC is insolvent, it must file its financial statements like any other company. Filing your annual return with ACRA correctly each year is where this status is claimed.
Benefit 2: freedom to lend to directors
Sections 162 and 163 of the Companies Act generally prohibit a company from making loans to its directors or to companies connected with its directors. This is a serious restriction that trips up many owner-managers who move money between their own entities. Exempt private companies are carved out of these prohibitions.
That freedom is genuinely useful for family and owner-run groups, but it is not a licence to be careless. Every such loan should still be properly documented, minuted, and recorded in the company’s accounts and statutory records. Read our detailed treatment of loans to directors under section 162 to understand where the EPC exemption begins and ends.
Benefit 3: interaction with audit exemption
EPC status is often confused with audit exemption, but they are separate concepts. Audit exemption today turns on the “small company” criteria in section 205C — the company must meet two of three thresholds (revenue up to S$10 million, assets up to S$10 million, no more than 50 employees). Many EPCs also qualify as small companies and are therefore exempt from audit, but a company can be an EPC without being audit-exempt, and vice versa. Check both tests independently.
How EPC status is recorded and maintained
You do not apply for EPC status; it follows automatically from the company’s share structure and membership. ACRA reflects it on the business profile. To keep it, your register of members must show that all shareholders are individuals and that there are no more than 20 of them. When you file the annual return, an EPC that wishes to rely on the filing exemption confirms its solvency in the prescribed declaration.
Practical housekeeping to protect the status includes: screening any incoming shareholder to confirm they are a natural person; watching the member count as you issue new shares or admit investors; and reviewing whether a proposed nominee arrangement introduces a corporation into the register beneficially.
When you lose EPC status
The status ends the moment the company no longer fits the definition — typically when a corporate shareholder comes on the register or the membership exceeds 20. From that financial year, the company must file full financial statements with ACRA and loses the section 162/163 loan exemption. Founders raising a priced round through a corporate venture fund, or inserting a holding company for tax or succession planning, should factor this into their filing calendar so nothing is missed.
Frequently asked questions
Is my company automatically an EPC?
If it is a private company with 20 or fewer shareholders and none of them is a corporation, yes. Check your ACRA business profile, which states the company type.
Does an EPC still need to prepare accounts?
Yes. The exemption is only from filing financial statements with ACRA. Proper accounts compliant with the Singapore Financial Reporting Standards must still be prepared and laid before shareholders.
Can an EPC have a corporate director?
Singapore requires every company to have at least one director who is a natural person ordinarily resident here. The EPC restriction concerns corporate shareholders, not directors, but note that companies cannot act as directors in Singapore in any event.
What happens if we breach the 20-member limit by accident?
The company simply ceases to be an EPC and must comply with the ordinary filing rules going forward. There is no penalty for the change itself, but failing to then file the required financial statements is an offence.
How Raffles Corporate Services can help
We maintain the statutory registers, confirm EPC eligibility each year, prepare the solvency declaration, and file your annual return correctly — and we flag in advance when a fundraising or restructuring will change your status. If you are unsure whether your company still qualifies, we can review your cap table and tell you where you stand.
— The Editorial Team, Raffles Corporate Services