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Singapore Business Entities

Update Date:2018-4-27 17:17:20     Source:www.3737580.com     Views:1183

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Singapore Business Entities refer to company types for business in Singapore. The following are common choices for business registration:

 

Singapore Business Entities -- Limited Liability Company
A Limited Liability Company (LLC) is a company limited by shares i.e. its liabilities are limited to the amount of share capital. LLC is a business entity registered under the Singapore Companies Act and a separate legal entity from its members. In a LLC, the liabilities of the owners are limited to the assets in the company and their personal assets are protected from business liabilities. A Singapore LLC can be of the following types:

 

1. Private Limited Company
A private limited company is a LLC in which the shares are held by less than 50 persons and are not available to general public. Most privately incorporated businesses in Singapore are registered as private limited companies. A private limited company’s name in Singapore usually ends with Private Limited or Pte Ltd. For example, our own company Janus Corporate Solutions Pte Ltd is incorporated as a private limited company. The shareholders of a private limited company can either be individuals or corporate entities or both.A private limited company is the most advanced, flexible, and scalable type of business incorporation in Singapore. It’s also the most preferred type of Singapore business entity for serious entrepreneurs (as opposed to sole proprietorship or limited liability partnership). For more detailed information about private limited companies, refer to Singapore company registration guide.

 

2. Public Limited Company
A public limited company is a LLC that may offer its shares to general public. A public limited company must have at least 50 shareholders and is subject to significantly more stringent rules and regulations since they have the power to raise funds from the public. Usually a public limited company is listed on a stock exchange. Public limited companies are outside the scope of this article as they are meant for large businesses.

 

3. Public Company Limited by Guarantee
A public company limited by guarantee is a type of business entity meant for non-profit purposes. For more details, refer to setting up a non-profit entity in Singapore.

 

 

Singapore Business Entities -- Foreign Company Registration Options
Foreign companies wishing to setup a presence in Singapore, have the choice of setting up a branch office, subsidiary, or a representative office in Singapore.

 

1. Subsidiary Company.
A subsidiary company is a private limited company incorporated in Singapore with the parent company as its shareholder. For small to medium-sized foreign businesses, a subsidiary company is the most preferred choice of registration in Singapore.

 

2. Branch Office. A branch office is registered in Singapore as an extension of its parent company and not as a separately incorporated entity. The liabilities of a branch office extend to its parent company.

 

3. Representative Office.
A representative office is registered in Singapore as a temporary arrangement for conducting marketing research activities. A representative office does not have any legal status and cannot be engaged in any profit yielding activities.

 

 

Singapore Business Entities -- Sole Proprietorship
A sole proprietorship is the simplest but the riskiest type of business form in Singapore. From a legal perspective, sole proprietorship is not a separately incorporated entity and therefore the owner and the business are one and the same. The owner personally owns all assets and liabilities of the business. There is no protection of personal assets from business risks and liabilities. As the sole proprietor of a business, you have unlimited liability, meaning that if your business can’t pay all its liabilities, the creditors to whom your business owes money can come after your personal assets. Many entrepreneurs are usually unaware of this enormous financial risk. If the business is sued or can’t pay its bills, the owner is personally responsible for the business’s liabilities.We consider this a serious drawback and hence do not recommend sole proprietorship to inspiring entrepreneurs.

 

 

Singapore Business Entities --Partnership

The partnership type of business structure attempts to address the limited-expansion constraint faced by a sole proprietorship by allowing two or more people to establish and co-own a business. A partnership firm has no legal existance separate from its partners. It comes to an end with death, insolvency, incapacity or the retirement of a partner. Further, any unsatisfied or discontent partner can also give notice at any time for the dissolution of the partnership. A partnership type of business structure may make sense only in very limited number of situations. We generally don’t recommend this type of business structure to business owners.

 

1. General Partnership
A general partnership is not a very attractive way to structure a business in Singapore because a) like a sole proprietorship, partners are personally liable for the debts and liabilities of the business; b) each partner can be held responsible for the actions of another partner.

 

2. Limited Partnership
The concept of limited partnership is an alternative to the general partnership type of business form in Singapore. It introduces the concept of a limited partner in addition to a general partner. The liabilities of limited partners are limited to their investment in the partnership (capital or property). However, such partners are unable to participate in the management of the business in a limited partnership. In a nutshell, even a limited partnership in Singapore is not a very attractive vehicle for setting up a business for most people.

 

3. Limited Liability Partnership (LLP)
Among the three types of partnership business entities, LLP is the most recent and most advanced business incorporation structure. It combines the features of partnerships and companies. LLP was introduced in Singapore in 2005 through enactment of Limited Liability Partnership Act. Registering an LLP gives owners the flexibility of operating as a partnership while enjoying many of the benefits that come with a corporate body like a private limited company.

 

 

Which business entity type to choose?

Deciding on the right business structure to incorporate in Singapore will depend on your particular situation and plans. As a general rule, you can use the following guidelines when making your decision:

 

1. If you are a local person and would like to register a small business where you will be the only owner and the nature of your products/service does not carry liability issues, it might be easier for you to register your business as a Sole Proprietorship. However, you must carefully consider the fact that in case of any business liabilities, the claimants can go after your personal assets.

 

2. If your business involves selling your services by way of the profession you hold (e.g. accountant, lawyer, architect, etc.) and you have one or more additional partners in a similar profession and would like to build a joint practice, setting up a LLP might be a suitable business structure for you.

 

3. In all other cases, incorporating a private limited company in Singapore would be the best choice. Although compliance requirements are little more complex, it is by far the best structure in the long run.

 

 

ATAHK Services

A properly structured private limited company is a very tax efficient corporate body; hence, this form is the most common type of business entity registered in Singapore. ATAHK Group Limited, with a professional team of more than 500, provides the oversea investors with the services of China company formation and management, financial and tax management.

 

 

Contact us

If the further queries, please do not hesitate to contact ATAHK at anytime, anywhere by simply visiting ATAHK’s website www.3737580.net , or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or email to anitayao@citilinkia.com 

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