Investor coming: Rescue needed. SOS


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Everything a Singapore startup founder should know about how to get the company’s accounting and secretarial records in order before an investor comes in.

Event at The HUB Singapore on 28 August 2014. More here:

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Investor coming: Rescue needed. SOS

  1. 1. Prepared for The HUB Singapore August 28, 2014 INVESTOR COMING: RESCUE NEEDED. SOS
  3. 3. WHAT WE WILL COVER What investors look for in a company Company secretarial documents every startup must have Financial reports investors need How to plan about a rescue if it’s all a mess
  5. 5. WHAT INVESTOR LOOKS AT Financial health: • Financial income (P&L), position (B/S) and potential (Forecast) • All bookkeeping and tax filings records up to date Compliance health: • Record and document for every decision of directors and shareholders • All statutory filings and records up to date
  7. 7. COMPLIANCE BIG 3S Singapore Companies Act M&AA Shareholders Agreement
  8. 8. COMPLIANCE BIG 3S – INTERNAL MANAGEMENT Shareholders Directors Officers / Company Secretary
  9. 9. COMPLIANCE HEALTH CHECK Current shareholders Current directors Company secretary The agreements in place: • Founders Agreement • Memorandum and Articles of Association • Shareholders Agreement Company Secretarial records are up to date
  10. 10. COMPLIANCE RECORDS STARTUPS MUST HAVE - 1 Copy of the Notice confirming Incorporation Copy of the latest Memorandum and Articles of Association (M&AA) Copy of physical Share Certificates Common seal
  11. 11. COMPLIANCE RECORDS STARTUPS MUST HAVE - 2 Copy of Directors Resolution/s Copy of Members Resolution/s Copy of all the Accounting and Corporate Regulatory Authority (ACRA) filings Copies of all the Financial Statements prepared and signed Company’s registers - directors and officers, members, share allotment, share transfer
  12. 12. WHY COMPLIANCE RECORDS Who can be appointed as a Company secretary? Professional with Specialized knowledge on Companies Act Why is it important for a company? Shows the investor that the company is in ‘good standing’ and is compliant at all times
  13. 13. COMPLIANCE DUE DILIGENCE & RESCUE Compliance health Due diligence Secretarial rescue
  14. 14. DIY DUE DILIGENCE Who is the company secretary Where is the common seal and company stamp Where are the share certificates Is the company secretarial file up to date Any notifications from ACRA
  15. 15. PROFESSIONAL DUE DILIGENCE: STAGE 1 – DOCUMENTS COLLECTION Latest Business Profile Latest M&AA ACRA screenshots for all the lodgments made from incorporation till date Business Profile purchased after each lodgment Signed Minutes of the Board meeting / Directors Resolution in writing from incorporation till date Signed Minutes of the Shareholders meeting / Consent to written resolution by members from incorporation till date Copies of all supporting documents for effecting the changes with ACRA Copy of company’s registers
  16. 16. PROFESSIONAL DUE DILIGENCE: STAGE 2 - REVIEW Based on ACRA extracts and lodgement: Review the list of ACRA lodgments made from incorporation of till date Review the company secretarial file Based on M&AA - review on: Directors proceedings Shareholders proceedings Changes to share capital including specific provisions relating to share transfers, share allotment etc Allotment of classes of shares including preference shares, debentures etc Report any other specific article for the company
  17. 17. PROFESSIONAL DUE DILIGENCE: STAGE 3 - REPORT Compliance Status Report includes: List of changes in the company and the related compliance status Missing documents (if any) Timeliness of effecting the changes in the company Where the compliance is up to date – a Compliance Certificate will be issued
  18. 18. WHEN DO YOU NEED COMPLIANCE RESCUE The company was incorporated DIY style online and there are no secretarial records at all The Company Profile doesn’t reflect the true company structure - shareholders, directors, business activity, capital You have a company secretarial file but are not sure if it is complete or accurate
  19. 19. COMPLIANCE RESCUE - SUMMARY Company secretarial rescue would broadly cover: • Provide a due diligence report with missing documents and filings (if any) • Re-create missing documents • File correct lodgements with ACRA • Update the statutory records
  21. 21. WHAT INVESTOR LOOKS AT Now - Accurate financial records from the date of incorporation till today: Income Statement (Profit & Loss) Balance Sheet Cash Flow Statement Moving forward - Financial plans: Forecast
  22. 22. WHEN YOU NEED BOOKKEEPING RESCUE Income looks negative! Undeposited funds Bank statement balance does not match your bookkeeping records You just haven’t started proper bookkeeping yet
  23. 23. PROFESSIONAL BOOKKEEPING RESCUE Get all the bookkeeping records ready (cheque butts, receipts, bank statements, personal expense claims). Bookkeeper will then: • Process backlog of accounts • Work based on limited information available • Correct errors • Identify nature of unusual trends in numbers
  24. 24. WHEN IS A GOOD TIME FOR RESCUE You are getting an investment You are applying for a government grant You are applying for a loan For showcasing good compliance For filing annual returns with ACRA and IRAS For passing audit successfully For your peace of mind
  25. 25. LET’S TALK @futureb00ks
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