A company is a business entity registered under the Companies Act, Chapter 50. Most companies in Singapore are private companies limited by shares - "Pte Ltd". The primary advantage of a company structure is that it provides the shareholders with a right to participate in the profits (by dividends) without any personal liability (the company absorbs the entire liability of the business). All companies must be registered/ incorporated with the Accounting and Corporate Regulatory Authority (ACRA).
- A company is a legal entity (i.e. it can sue or be sued in its own name and can own or hold any property).
- The owners of the company are called shareholders. There must be a minimum of one share owned by one shareholder. The value of the share can be just S$1.
- Profits are taxed at corporate tax rates.
Registration Process Or Incorporation
Almost anyone or any company can incorporate a company. However, there must be at least one director of the company above 18 years and be one of the following:
- Singapore Citizen
- Singapore Permanent Resident
- Employment pass Holder
- Approval In Principal Employment Pass Holder
- Dependant Pass Holder
Types Of Companies
Companies can be classified as private or public. When a company can offer shares, debentures and other interests to the public, it is known as public company.
Private Companies can be further divided into 2 categories:
Non Limited Companies
It can be set up with relatively few formalities. The owner would be personally liable for all the debts if the business fails. There is no legal requirement for non-limited companies to make any of their financial information public. Non-limited companies are generally referred to as "businesses".
Limited Companies that are privately owned are also referred to as Private Limited. The liability for a private ltd company is limited to the extent that the liability of the company's shareholders is limited to the value of the shares and not their personal funds. All Limited companies are legally required to submit Company Accounts and Annual Returns every year.
Companies In Singapore
The three types of Companies in Singapore are:
- Private/public companies limited by shares
- Public companies limited by guarantee.
- Unlimited companies.
Most companies in Singapore are private companies limited by shares-"Pte Ltd". Private companies having more than 50 shareholders must be converted to public companies limited by shares.
Not for profit, religious and charitable organizations usually set up public companies limited by guarantee. There is no share capital. When the company is wound up, each member pays a nominal fee that could be as little as S$1. Unlimited companies are very rare. They are companies with no restriction on membership or liability.
Set Up Costs
- Fees for approval of company name: S$15 per name.
- Registration fees: S$300 for companies limited by shares. S$600 for companies limited by guarantee.
- Yearly renewal fees: Not applicable.
Registering A Company
All businesses, whether it’s a one-owner business or a multinational company, must register with the Accounting and Corporate Regulatory Authority (ACRA). The objective of ACRA is to make Singapore the trusted and best place for business and ensure the availability of a responsive and trusted regulatory environment for businesses and public accountants. ACRA believes in a strong commitment to the customers in delivering service excellence in alignment with the vision: "Singapore: The trusted and best place for business".
For further details on ACRA please visit, Accounting and Corporate Regulatory Authority (ACRA)
Exemptions From Registration
Certain Individuals, Professionals and Organizations are exempted from registration.
Individuals Who Are Exempted
Individuals who do not need to register with ACRA include:
- Licensed hawkers
- Domestic craftsmen
- Taxi drivers
- Trishaw riders
- Sampan men
- Private fish and prawn pond keepers
Professionals Who Are Exempted
Professionals such as lawyers and doctors do not need to register with ACRA as they are managed by their respective professional bodies. The Law Society is the governing body for the lawyers in Singapore, which is largely self-regulatory. The Academy of Medicine in Singapore is the governing body for doctors. Its governing constitution is stipulated in Articles 60-77 of the Memorandum and Articles of Association.
Organizations That Are Exempted
Organizations such as statutory boards, mutual benefits co-operatives and charitable institutions that are set up by law also need not register. By law a statutory board is an autonomous government agency established by an act of Parliament that specified the purpose, rights, and powersof the body.