In a world brought together by technology and fast transportation, businessmen and investors are always looking for new ventures and investment options. A market that has time and time again proven to be quite the successful market in Singapore. And while part of the success can be attributed to the taxation structure and the geographical location of the country, part of it can be attributed to how easy it is for a person or entity to start a company.
So, what options do potential investors and businessmen have in terms of local companies in Singapore? In this article, the reputable corporate compliance service provider, HeySara provides the necessary information.
Types of Companies in Singapore
There are various company structures that are allowed in the country. It is up to the investors or stakeholders to decide on the best business structure depending on the scope of the business and the intended scale of activities, among other options. Read more on how to choose the appropriate business structure in Singapore.
Provided for in Chapter 50 of the Singapore Companies Act, Accounting and Corporate Regulatory Authority (ACRA) is the regulatory body that handles the incorporation of any and all new businesses.
In addition, each company structure selected comes with its own set of cost implications, liabilities and tax obligations. All this information needs to be taken into account before the final decision is made.
As provided for by Singapore Law, below are the types of local companies in Singapore.
The Private Limited Company
From our research and experience offering corporate compliance services, this is the most requested business structure by businesses. It is a category of a limited liability company.
Some of the characteristics of a private limited company in Singapore include:
- The company owners can vary from 1-50
- For an individual to be considered a stakeholder should be above the age of 18
- A private limited company receives a separate legal status from that of its owners
- The company can sue or be sued as well as purchase property in its name.
- In terms of lifespan, the company exists in perpetuity since it is not tied to any shareholder or company owners.
- The name of the company must have the phrase Private Limited or abbreviations ‘Pte Ltd.’.
The characteristics of a private limited company, especially that of a separate legal status, makes it a preferred choice by both locals and foreigners.
Another reason why new companies prefer this structure is the tax exemptions. Companies can enjoy up to full exemption on their taxes for the first $100,000 of taxable income and 50% for the next $200,000. This exemption applies for the first three years of normal business operations.
Public Company Limited by Shares
A public company is also a type of limited liability company (LLC) but the main difference is in its ownership composition and the ability of the company to raise capital through the use of shares or debentures.
Some of the characteristics of a public company limited by shares include:
- The number of shareholders/ company owners can be more than 50
- Shareholders have limited liability
- Can offer the general public shares and debentures to raise capital
- The amount of shares offered to the public must be compliant with the Singapore Companies Act’s guidelines.
Due to the setup and composition of such a company, such a company structure is ideal for large businesses that intend to have large-scale operations.
Public companies limited by shares can be listed on the stock exchange. In Singapore, such companies are referred to as “listed companies”. However, before such a company issues out any shares to the public, they will require a prospectus with the financial regulatory authority body, the Monetary Authority of Singapore, MAS.
While it may be a straightforward process, opening a company in Singapore needs a lot of fine-tuning. Call upon our corporation compliance services at HeySara. All our services are charged at competitively priced rates, making them affordable across all budgets.
Public Company Limited by Guarantee
This company structure is considered ideal for organizations whose main operations are for a non-profitable purpose.
Some features of such a company include;
- Owners/ shareholders are referred to as members.
- Unlike the other company structures, members are not required to offer any capital.
- Liability of members is limited and as described in the Memorandum of Association.
Organizations that are formed with this type of company structure include clubs, trade associations, professional societies, and religious & charitable organizations.
Registration Process in Singapore
The process of registering a private company is similar to that of registering a public limited company. While the complex might be a bit more complex, here are the main steps for registering a company:
1. Selection of the company name
2. Preparation and signing of the Articles and Memorandum of Association
3. Compliance with the standards of the Accounting and Corporate Regulatory Authority (ACRA); mostly submission of the needed documents
4. Registration for taxation and Goods & Services Tax filing services
5. Registration for social security
While detailed and informative, the content provided in this article is not a comprehensive guide when it comes to the incorporation of a company in compliance with Singapore Law. For that, we recommend contacting the leading service provider known for their comprehensive and customized corporate compliance solutions, HeySara.
Appreciating the importance of technology in the 21st Century, we incorporate digital tools and resources to offer our clients convenient and fast access/ retrieval of documents. When it comes to company incorporation, taxation, secretarial, and overall compliance of your company, there is no company better positioned in the region than HeySara.
Get in touch with us and get a quote for our corporate compliance services. You are guaranteed 100% client satisfaction with HeySara as your partner.