Watch the video or read below
Choosing which business structure to adopt when incorporating a company in Singapore is indeed a challenging start for every business owner in Singapore, especially if these business structures exhibit their own advantages and disadvantages.
This in-depth discussion will help you compare the exempt private limited company, private limited company, and public limited company among each other—mainly in terms of the filing of requirements, annual compliance, shareholder policies, the filing of accounts and XBRL, and audit.
An exempt private limited company can only have 20 shareholders. In this business structure, individuals are the shareholders and no corporate entities are holding its shares.
A private limited company can have a maximum of 50 shareholders, who can either be individuals or corporate entities.
A public limited company can have more than 50 shareholders, who can either be individuals or corporate entities.
An exempt private limited company is restricted to only a few individuals, who provide the capital required for this business structure. Hence, they do not need to disclose their reserves and financial statements publicly. They will also be granted considerable exemption from the filing of requirements.
The filing of requirements for a private limited company is slightly stringent as the shares of this business structure are owned by a small or large corporate entity. A private limited company must also annually file its financial results to ACRA in XBRL format.
When it comes to a public limited company, its company shares are offered to the public in exchange for money. Therefore, the strictest policies need to be applied for this business structure. It must submit a prospectus with the Monetary Authority of Singapore (MAS) first before offering money to the public, if it plans to get listed. Audit of the accounts is compulsory and filing of accounting results with ACRA is also mandatory.
Offering shares to the public is only allowed for a public limited company, not for an exempt private limited company and a private limited company.
Filing of accounts and XBRL filing are optional for an exempt private limited company, while they are mandatory for a private limited company and public limited company.
Business owners will most likely avoid choosing the public limited company as their business structure due to its strict and costly compliance requirements, as well as its company auditor and company secretary requirements. Between the exempt private limited company and private limited company, we highly encourage you to choose the exempt private limited company due to its simple compliance requirements and exemptions.
If you are a foreign business owner planning to incorporate a company in Singapore, and can not avoid corporate shareholding, then the private limited company would be the most suitable option for you.
Whenever possible, always choose the exempt private limited company when incorporating your company in Singapore. With this business structure, your business can benefit from several exemptions and the most convenient company incorporation process in the country.
New Company Setup
New Company Setup
New Branch Setup
Singapore Bank Account