Singapore is fast becoming the business city of choice. Its economy has been defined by its position as a small country with limited natural resources and a relatively small population, located strategically in the heart of Asia Pacific. An Excellent business and social infrastructure, political stability and economic ties with other countries has built up Singapore as a truly vibrant, cosmopolitan, and international global business centre.
Private Limited Company
- A company limited by shares is a business entity registered under the Companies Act, Chapter 50. It has a legal personality i.e. it has rights to own properties, can sue or be sued. It usually has the words ‘Pte Ltd’ as part of its name.
- There must be at least 1 shareholder and at least 1 director of the company who is locally resident in Singapore, at least 18 years old, cannot be disqualified from acting as a director of a company e.g. an undischarged bankrupt.
- Two types of Private Limited Company
A. Exempt/Deemed Exempt Private Company
– Number of shareholders is limited to 20 or less and can only be individuals
B. Private Company
– Number of shareholders is limited to 50
- It usually has the words ‘Ltd’ as part of its name.
- The number of shareholders can be 50 or more.
- Company may raise capital by offering shares to public.
- No restriction on transfer of shares.
- A prospectus must be registered with ACRA before making public share offers.
- Foreign company who wish to commence operations in Singapore may wish to set up a branch in Singapore.
- It is an extension of the head office and is not limited in liability.
- Under the Companies Act, the head office is responsible for the requirements of the foreign branch and liable for any offence imposed on the branch.
- Under the Companies Act, the minimum number of authorised representatives required is one.
- The branch of a foreign company must have at least one authorised representative who is ordinarily resident in Singapore.
- Being “ordinarily resident in Singapore” means the authorised representative’s usual place of residence is in Singapore. A Singapore Citizen, Singapore Permanent Resident or an EntrePass holder can be accepted as a person who is ordinarily resident here.
Sole proprietorship and partnership are not legal entities in which it cannot sue or be sued in its own name and it cannot own or hold property. A sole proprietorship is a business owned by an individual or one company. The owner must be a local resident in Singapore. If the owner is foreigner, a local manager must be appointed.
Partnership can have 2 or up to 20 partners. Once exceed 20 partners, it must be incorporated as a Company under the Companies Act. At least one of the owners must be a local resident in Singapore.
Limited Liability Partnership (LLP)
A LLP is a partnership with limited liability. It is a legal entity and can enter into contract and hold property. It combines the benefits and flexibility of a partnership with that of private limited companies.
The main advantages are that the personal assets of the partners are protected. Owners are not personal liable for the wrongful acts of other owners but can be personally accountable for debts and losses resulting from their own acts. Any changes to the LLP do not affect its existence, rights or liabilities.
Foreign companies that are keen on exploring the viability of doing business in Singapore may wish to set up a Representative Office (RO). An RO has the benefit of allowing a foreign company to test out the business environment in Singapore before committing to any investment decisions. However, foreign companies wanting to maintain long term operations in Singapore will be required to incorporate as legal entities with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore.
An RO is a temporary facility provided to foreign companies to test the business environment in Singapore. It must confine its activities to market research, feasibility studies and liaison work on behalf of its parent company.