Singapore Business Guide
This article teaches you various aspects of opening a business in the city-state of Singapore. Here you will learn about the various ways in which you can structure your business entity with the features of all of these structures. All businesses are regulated by ACRA in Singapore. You also need to comply with the licensing requirements depending upon the industry your business falls in. The following are the major business entities in Singapore.
Exempt Private Company or the EPC
This kind of business structure can have at the most 20 shareholders, all of whom must be natural persons and not business entities. If the total turnover of the EPC is less than S$ 5million, there is no need to get the accounts audited. If the EPC has filed online solvency declaration and obtained a certificate from the authorities to this effect, there is no need to file accounts with ACRA. However, the EPC must file a tax return annually with IRAS as well as ACRA within a month of the AGM.
Public Company Limited by Shares
This is another popular business entity in Singapore that is incorporated locally. All such companies have to include the suffix Limited after their name to be recognized as limited companies. These companies are seen listed on various stock exchanges and they issue shares and debentures among the public to raise capital. Before raising capital, such a company is required to give its prospectus to the Monetary Authority. The company has to be not only registered with but also file its accounts with ACRA. Every such company has to file its tax returns within a month of its AGM with ACRA as well as IRAS.
Companies Limited by Guarantee
This is a business structure that carries out its activities not for profit but in the interest of the public or the country. Such a company does not have a share capital and thus it does not have shareholders but only members. This company needs to be registered with ACRA. It has to maintain annually audited accounts with ACRA and also file annual tax returns within a month of its AGM with both IRAS and ACRA.
This is a very simple business structure with one individual being in charge of the business. He is responsible for all the profits as well as losses that accrue to the business and he takes all decisions. Those who are citizens of Singapore, permanent residents, hold employment pass or dependant pass can apply for such a business entity. Even foreign nationals can make sole proprietorship company though they are required to appoint a Singapore resident as a manager. Such a business entity has to be registered with ACRA.
This type of business requires the number of partners between 2 and 20. The entity becomes a company when this number goes past 20. All the partners are held responsible for the losses and debts and they are also liable for the deeds of other partners. Registration with ACRA is a must for a General Partnership.
This kind of a business entity has at least one general partner and at least one limited partner. While the limited partner owes responsibility only up to the extent of his contribution, it is the general partner who owes responsibility for the actions and debts of all other partners of the organization. This partnership is called Limited partnership and needs to be registered with ACRA.
Limited Liability Partnership
This type of business structure is seen in the cases where debts owned by some partners are not owned by other partners. In a Limited Liability Partnership, one partner is never liable for the deeds of other partners. However, he is always accountable for the losses accruing to the company because of his own deeds or omissions. A Limited Liability Partnership has to be registered with ACRA.
As the name implies, this is a business entity that results from the deed of a trust. There is a trustee who looks after the affairs of the business to serve the interests of stakeholders in this business. This is a kind of business structure that suits industries where there is a huge investment involved such as shipping and realty businesses. Unit holders in this kind of business receive payments whenever there are surplus cash flows, unlike other businesses where profits are disbursed among shareholders. Registration with Monetary Authority of Singapore is a must to have such a business entity.
Knowing the basic features of all these business structures makes you aware of the pros and cons of starting a business in Singapore. You can know more about all these entities in detail from our website to make the right choice when starting your business in Singapore.