A Closer Look At A Company As A Business Entity
Of all types of business organisations, the company has relatively the largest composition. A company is a type of business considered to be a separate legal entity from the rest of its stockholders as well as directors.
As such, members of a company enjoy limited liability in company matters. As a separate legal entity, the company can also use its name in legal suits (and likewise, can also be sued as a company). It can also acquire properties under its name although members remain not personally liable for its debts and losses by virtue of their limited liability.
There are also three basic subtypes of companies: the Exempt Private Company, which has a maximum of 20 members; a Private Company with a maximum of 50 members; and the Public Company which has more than 50 members. In addition, the Exempt Private Company is one whose shares are not owned by beneficial interest by any corporation.
While a partnership is composed of partners, a company is composed of shareholders. There has to be at least one stockholder for a company to exist. In addition, a company has to have at least one director who is a resident of Singapore (either a Singapore citizen, Permanent Resident, or holder of Employment Pass or Dependent Pass). Furthermore, the director has to be at least 18 years old. Foreigners who want to function as local director of a company need to apply for an EntrePass at the Ministry of Manpower first.
Compared with the other business types, such as sole proprietorship, partnership, limited partnership, and limited liability partnership, the company costs more to set up and maintain. It also needs to comply with certain statutory requirements, such as hiring a company secretary within the first six months of incorporation; appointing an auditor within three months (unless the company is exempted from audit requirements); and filing of annual returns.
Furthermore, a company needs to pay S$315 total set-up fee, which includes the S$15 name application fee as well as S$300 incorporation fee to the Accounting and Corporate Regulatory Authority (ACRA). Once registered, a company enjoys perpetual existence unless it undergoes voluntarily winding up courtesy of its members or creditors; or forced winding up according to orders from the High Court. It can also be stricken off the Registrar if it fails to renew or comply with other rules and regulations.