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Of all the choices you make while registering a Company in Singapore, one of the most significant decision is to choose a business structure (i.e. legal entity) for your company. This is important because it will have a bearing on the amount taxes that you will pay, the perception and image of your business among clients, legal documents, paperwork that would be required, the liabilities of your company, and the ability to borrow money and expand the business.
Most of the companies in Singapore are registered as private limited companies. Such private limited companies generally put the suffix "Private Limited," "Pte Ltd" or "Ltd as part of the name of the company.
This guide provides an overview of and differences between the different types of business entities in Singapore. Each of them is subject to various regulatory and tax regimes reflecting their organisation and ownership.
The following are the main types of business entities in Singapore:
It is a locally incorporated firm with a maximum of 50 shareholders. A private limited company limits the ability of its shareholders to transfer their shares in the company.
The limitation on the right to sell shares of a private company typically takes the form of an obligation that the transfer be first accepted by the board of directors of the company or a requirement that the shares be first offered to be sold to current shareholders.
A Public Firm Limited by Shares is a publicly-owned company with more than 50 shareholders. Public companies may or may not be listed in the stock market. If listed, they are commonly referred to as "listed companies." The company may raise capital by selling shares and bonds to the public. The company must file a prospectus with the Singapore Monetary Authority before making the public sale of bonds and stocks.
A Public Company Limited by Guarantee is the kind that carries out non-profit activities like promotion of the arts or some charitable work. The Minister may approve the registration of a company without adding the word 'Limited' or 'Berhad' to its name.
A limited company (LC) in the generalized form is a business structure which restricts the amount of liability that the shareholders of the company undertake. It is thus a regulatory framework thereby guarantees that the liability of the members of the company or of the subscribers is limited to their stake in the company by means of their commitments and investments.
Singapore Private Limited Company is deemed to be a tax resident; it is eligible for local tax exemptions and benefits. It has the following basic features:
Benefits of forming a private limited company in Singapore include:
Following are the disadvantages of a Private Limited Company:
Yes, there are, but they are extremely rare. Approximately one in 100000 companies would be registered as unlimited. For example, Mobil Producing Nigeria Unlimited or GlaxoSmithKline Services Unlimited
There are certain sectors where the commitment required by the owner is very high or very high moral standards like health or research. For example, Mobil Producing Nigeria is expected to display a dispassionately high standard of commitment and ethical standards while finding oil in Nigeria. It means that the company pledges to not only take care but preserve the local resources, flora, fauna, forests and nature etc. Therefore, in such case, a government may ask the company to register as unlimited so that it should bear the responsibilities while getting the business in the host country.
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