Finance Companies Act 1967 · 2020 Revised Edition · Part 3 · Reserve Funds, Dividends, Balance Sheets and Information
18. Maintenance of reserve fund by finance companies
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finance company
“finance company” means any company licensed under this Act to carry on financing business, and all branches and offices in Singapore of such a company are deemed to be one finance company for the purposes of this Act;
maintain a reserve fund;
transfer to that reserve fund out of the net profits of each year, after due provision has been made for taxation —
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;
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
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.
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.