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Business Registration
Singapore Business Registration Options
Before embarking on a Singapore Business Registration,
an important decision to make early on is to decide what legal
form your business will take. In Singapore, you can choose
to operate your business as a private limited company,
sole proprietorship, or limited liability partnership.
When deciding which category to register your Singapore business under,
you need to consider the scale of your business and the amount
of debt you might incur, as the liabilities for businesses
are different depending upon which legal form you choose.
Deciding on
the Right Legal Form for Singapore Business Registration
Private Limited Company
A private limited company ("Singapore Company") is incorporated under the
Singapore Companies Act and registered with Accounting & Corporate
Regulatory Authority (ACRA). As one of the types of Singapore business
registration, a Singapore Company is a separate legal entity
from its owners and as such the owners of the company are generally not
liable for the debts of the company.
The most common type of company to
be incorporated in Singapore is the private company limited by shares,
commonly known as a private limited company. Shareholder's liability, in
most cases. is limited to the amount they paid for.
You should choose to register a Singapore private limited company if one or
more of the following is true:
- You are a foreign entrepreneur planning to register a business
in Singapore
- Your business has the potential to grow big
- You may need to secure a loan or an investment for your business
growth
- Your business has the potential to be sued by others
- There are multiple people who want to own the business
- You may sell part of your business to others down the line
- You need to present a professional image to your potential
clients or bankers
- You are a high risk startup
- You plan to conduct international trading
- You plan to expand your business overseas
Registering and maintaining a private limited company involves more
paperwork than sole proprietorship.
Read details of Incorporating
a Singapore Private Limited Company.
Are you a foreign entrepreneur? Check out
EntrePass for foreign
entrepreneurs.
Popular Topic:
Frequently Asked
Questions on Singapore Business Registration
Generally, the selection of a entity for
Singapore business registration starts with a simple question: Should you incorporate a company?
If after reading the above, you decide it isn't necessary, you can
register your business in Singapore either as a sole proprietorship or
as a limited liability partnership.
Sole Proprietorship
A sole proprietor is an individual who runs a business on his/her
own behalf. There are no other directors, shareholders, or partners
involved. Sole proprietorships are often one-man show, with no other, or
very few, staff. This is the simplest form of business registration in
Singapore and typically used by local mom-and-pop type business
activities.
The biggest problem with sole proprietorship is personal liability. A
sole proprietorship is not a corporate entity and there is no
distinction between personal assets of the owner and the business. If
you incur significant debts, you may be forced to sell your personal
assets to pay off the debt.
As a sole proprietorship, you are limited in the amount of financial
resources you have available to you. Banks and financial institutes are
often reluctant to loan significant amounts of money. You are left to
rely on your own savings and assets.
Sole proprietorship is be registered under the Singapore Business Registration Act
except certain professions.
Limited Liability Partnership
Limited Liability Partnership (LLP) is a separate legal entity and was
introduced in April 2005. LLP is defined under the Partnership Act and has to be
registered with the Accounting & Corporate Regulatory Authority (ACRA).
Limited Liability Partnership in Singapore is a relatively new type
of business registration in Singapore. It operates much like a
partnership, but allows members of the LLP to take an active role in the
business of the partnership, without exposing them to personal liability
for other partners' acts. The liability protection is generally limited
only to liabilities arising out of malpractice committed by other
partners. A partner will not be protected from liabilities arising from
contracts or from malpractice committed by partner himself or those he
or she supervises.
Many of the legal and tax issues have not yet been fully
resolved.
The minimum number of partners in an LLP is two. LLP combines the limited liability features of companies with the
operational elements of sole proprietorships. The members may agree on how profits and losses
are to be shared and how the business is to be run.
Read details of
Registering a Limited
Liability Partnership in Singapore
Comparing Various Legal Forms for
Singapore Business Registration
| Feature |
Company |
LLP |
Sole Proprietorship |
| Number of Owners |
One, minimum |
Two, minimum |
One, maximum |
| Limited Liability |
Yes |
Yes, but not as good as Company |
No |
| Management Control |
Board of Directors |
Depends on Partners Agreement |
N/A |
| Transfership |
Shares are generally freely transferable |
Right to economic interest transferable, but not the right
to participate in management and control |
N/A |
| Continuity |
Death or withdrawal of a shareholder does not effect its
existence |
Depends on the agreement and number of partners |
On withdrawal or death, sole proprietorship ends. |
| Doing Business Overseas |
No problem |
Difficult |
Difficult |
Related Topics
Information Index
Contact Us for Business Registration
in Singapore
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Options for Foreign Individuals
Options for Foreign Companies
Options for Singapore Residents