This guide provides a side-by-side comparison of the different types of business entities in Singapore, namely, Sole Proprietorship, Limited Liability Partnership, and Private Limited Company.
|Types of Companies Structure||Sole Proprietorship||Limited Liability Partnership||Private Limited Company|
|Suitable For||Individual with low risk||Professional firms such as accountancy, law and architecture.||For businesses with projected growth, which may require additional funding for expansion.|
|Low cost setup with limited liability protection||Tax exemptions|
For new exempt companies only: taxed at the corporate rate; first S$100,000 of net income each year
is tax free and the next S$200.000 taxed at 8.5% for the first 3 years.
|Disadvantages||Personal Assets Not Protected||None||Compliance obligations such as Financial Reports, AGMs, etc|
|Separate Legal Entity||No||Yes||Yes|
|Cap on Number of Members||One||Unlimited||Maximum 20 for exempt companies|
|Minimum Setup Requirement||One owner||2 partners||1 shareholder and 1 director (the same individual can be both)|
|Accounts Audit||No||No||Yes, for turnover above S$5 Million or non-exempt companies|
|Tax Treatment||Taxed at personal income tax rate||Taxed at personal income tax rate||Dividends are tax exempt|
|Cessation of Business upon Death of a Member/Partner||Yes||Yes||No. Equity shares go on in perpetuity.|