Business Incorporation Singapore is one of the world’s most attractive business destinations, attracting entrepreneurs from all over the globe. With its low corporate tax rates, strategic location, excellent infrastructure, and highly skilled workforce, Singapore is a haven for entrepreneurs looking to establish their business. One of the first steps in setting up a business in Singapore is incorporating your company. Incorporating your company provides it with legal status, which is critical to its operations. This article provides a comprehensive guide to business incorporation in Singapore.
Understanding Business Incorporation
Business incorporation refers to the process of creating a legally recognized entity that is distinct from its owners. Incorporation gives the company a separate legal entity, which means that it can own property, sue and be sued, and enter into contracts in its own name. This means that the owners of the company are not personally liable for the company’s debts or obligations.
Types of Business Entities
There are several types of business entities Business Incorporation Singapore, and the choice of entity depends on your business needs, objectives, and long-term plans. The most common types of business entities in Singapore are:
1. Private Limited Company
2. Sole Proprietorship
3. Partnership
4. Limited Liability Partnership (LLP)
5. Private Limited Company
The private limited company is the most popular type of business entity in Singapore. It is a separate legal entity, which means that it has its own rights and liabilities. The shareholders of the company are only liable for the amount of capital they have invested in the company. Private limited companies are governed by the Singapore Companies Act and are required to submit annual returns and audited financial statements to the Accounting and Corporate Regulatory Authority (ACRA).
Sole Proprietorship
A sole proprietorship is an unincorporated business owned by one person. The owner is personally liable for all the debts and obligations of the Business Incorporation Singapore. Sole proprietorships are easy to set up and maintain, but they offer no protection to the owner’s personal assets.
Partnership
A partnership is a business owned by two or more persons. Each partner is personally liable for the debts and obligations of the partnership. Partnerships are easy to set up and maintain, but they offer no protection to the partners’ personal assets.
Limited Liability Partnership (LLP)
An LLP is a hybrid business entity that combines the benefits of a partnership and a private limited company. It offers the flexibility of a partnership, where the partners have full control over the management of the business, and the limited liability protection of a private limited company. The partners of an LLP are not personally liable for the debts and obligations of the partnership.
Incorporating a Private Limited Company
Incorporating a private limited company is a straightforward process Business Incorporation Singapore. Here are the steps involved:
Reserve a Company Name
The first step in incorporating a private limited company is to reserve a company name with ACRA. The name reservation can be done online through ACRA’s BizFile+ portal. The name reservation is valid for 120 days.
Appoint a Company Director and Company Secretary
Every private limited company must have at least one director and one company secretary. The director must be a natural person and a resident of Singapore. The company secretary must also be a resident of Singapore.
Share Capital and Shareholders
Private limited companies must have a minimum of one shareholder and a maximum of fifty shareholders. The shareholders can be individuals or corporations. The minimum share capital requirement is SGD 1.
Register the Company with ACRA
The next step is to register the company with ACRA. The registration can be done online through ACRA’s BizFile+ portal. The registration Business Incorporation Singapore process involves submitting the company’s constitution, details of the directors and shareholders, and the company seal.
Incorporation of a Sole Proprietorship or Partnership
The process of incorporation for a sole proprietorship or a partnership is similar to that of a private limited company. The following are steps involved:
Reserve a Company Name
The first step is to reserve the company’s name with ACRA. The name reservation can be done online via ACRA’s BizFile+ portal. Appoint Company Director, Secretary and Partners/Members/Shareholders (as applicable) Every sole proprietorship or partnership must have at least one director, and one company secretary, who must be a resident of Singapore. The partners or members, as applicable, must also be residents of Singapore.
Register the Company with ACRA
The next step is to register the company with ACRA. The registration can be done online through ACRA’s BizFile+ portal. The registration process involves submitting the company’s constitution, details of the directors, members, and shareholders, and the company seal.
Note: Colloquially referred to as a “One-Man-Band”, a Sole Proprietorship is different from a Private Limited Company in that all assets are owned by the owner of the business entity in question (namely, you), whereas in a Private Limited Company Business Incorporation Singapore all assets remain owned by that business entity itself.