Singapore legislation

Section 18

of Finance Companies Act 1967

Section 18

Maintenance of reserve fund by finance companies

(1)

Every finance company must —

(a)

maintain a reserve fund;

(b)

transfer to that reserve fund out of the net profits of each year, after due provision has been made for taxation —

(i)

so long as the amount of the reserve fund is less than 50% of the paid‑up capital, a sum of at least 50% of those net profits;

(ii)

so long as the amount of the reserve fund is at least 50% but less than 100% of the paid‑up capital, a sum of at least 25% of those net profits; and

(iii)

so long as the amount of the reserve fund is 100% or more of the paid‑up capital, a sum of at least 5% of those net profits.

(2)

Any finance company which fails to comply with subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine of $2,000 for every day during which the offence continues after conviction.

Read in full context — Finance Companies Act 1967 →