In Singapore, businesses fall within the regulatory purview of the Accounting and Corporate Regulatory Authority (ACRA). There are also certain industry–specific licensing requirements that need to be complied with, before you can start the business.
Business forms structures which may be formed in Singapore:
Exempt Private Company (EPC): Has a maximum of 20 shareholders, none of which may be a corporation (either directly or indirectly). An EPC with annual turnover of up to SGD5m is not required to audit its accounts; audit requirements apply to those with annual turnover above SGD5m. Accounts do not need to be filed with ACRA, although an Exempt Company Certificate declaring the EPC’s solvency status must be submitted. An annual tax return must be filed with both ACRA and the IRAS within one month of the company’s annual general meeting.
Public Company Limited by Shares: A locally incorporated company, with no limit on the maximum number of shareholders. A public company must have the word “Limited” as part of its name. Such companies are often listed on a stock exchange and raise capital by issuing shares and debentures. The company must register a prospectus with the Monetary Authority of Singapore before making public offers of shares and debentures. The company must register with ACRA. Accounts must be audited annually and filed with ACRA. An annual tax return must also be filed with both ACRA and the IRAS within one month of the company’s annual general meeting.
Company Limited by Guarantee: These companies carry out non-profit-making activities for the public or national interest. It has no share capital, and therefore usually consists of members rather than shareholders. The company must register with ACRA. Accounts must be audited annually and filed with ACRA. An annual tax return must also be filed with both ACRA and the IRAS within one month of the company’s annual general meeting.
Sole Proprietorship: A Sole Proprietorship is the simplest form of business entity with only one owner who is the decisive authority and responsible for all assets and liabilities belonging to the business. Singapore citizens or permanent residents; holders of Employment Pass, EntrePass or Dependant’s Pass may register a Sole Proprietorship. Foreign individuals and companies may also register a Sole Proprietorship but must appoint a Singapore resident manager. The Sole Proprietor must register with ACRA.
General Partnership: A General Partnership must consist of between two and 20 partners. If the number of partners exceeds 20, the business must register as a company. Each partner is liable for the debts and obligations of the partnership, and can be held responsible for the other partners’ actions. A General Partnership must register with ACRA.
Limited Partnership: A Limited Partnership consists of at least two partners, with at least one general partner, who is responsible for the actions, debts and obligations of the partnership, and at least one limited partner, who is liable only to the extent of his or her agreed contribution. The partnership must register with ACRA.
Limited Liability Partnership: A Limited Liability Partnership has separate legal identity much like a Private Company Limited by Shares, whereby the partners are not liable for the partnership’s debt. However, a partner may be held personally liable for losses resulting from his or her wrongful act or omission; but, unlike in a General Partnership, a partner cannot be held liable for the wrongful act or omission of another partner. Limited Liability Partnerships must register with ACRA.
Business Trust: A Business Trust operates a business enterprise, but is created by a trust deed. A trustee manager holds legal title to the Business Trust’s assets, and manages them on behalf of the unit-holders, who hold the beneficial interest in the assets. This entity is particularly useful for businesses with large capital outlays, such as those in property or shipping. Distributions can be paid to unit-holders out of operating cashflows (and not from profits, as for companies in relation to dividend payments). If units in the Business Trust are to be offered to the public, the trust must register with the Monetary Authority of Singapore.
Given the basic details mentioned above, you should have gained a general idea on the advantages and disadvantages of starting a Singapore company. Browse through the rest of the content on our site and find out more on how to start a Singapore company.
If you still unsure and need more clarification, contact us at email@example.com. When you contact Rikvin, you will speak directly to a member of our Business Advisory Team, who will be happy to assist you in your quires.