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Epica Learn Series

Types of Companies in Singapore – Limited and Unlimited Companies

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What is the meaning of the word Limited in the Singapore Company Name? Example Epica Pte Limited?

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.

Types of Private Limited Companies in Singapore

The following are the main types of business entities in Singapore:

Types of companies in singapore - Types of private companies

Types of companies in singapore - Private limited company

Private Limited Company

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.


Types of companies in singapore - Public limited company

Public Company Limited with Shares

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.


Types of companies in singapore - Guarantee public limited company

Public Company Limited by Guarantee

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.

What Is a Limited Company (LC) in Singapore?

Types of companies in singapore - What is LC

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.

What are the Basic Characteristics of a Private Limited Company in Singapore?

Types of companies in singapore - Basic features of privated limited company

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:

  • An autonomous legal body separate from its owners – can sue and be sued on its own behalf. The shareholders and directors of the company are not accountable for the debts of the company.
  • Company directors and shareholders have limited liabilities with respect to the company. Till the time shares are paid up, there are no further liabilities of the members/shareholders to the creditors of the company, and their personal properties are secured from those creditors.
  • It can own assets and property.
  • 1 to 50 shareholders.

Advantages of a Private Limited Company

Benefits of forming a private limited company in Singapore include:

Types of companies in singapore - Advantage of private company
  • Shareholders shall not be responsible for the debts and losses of the company.
  • Income is charged at the corporate tax rate. Dividends in possession of shareholders are tax-free
  • Newly formed companies have special tax benefits and exemptions. For example, 75% of the first S$100,000 of taxable income is excluded from taxes. The tax rate can also be as low as 5.6 per cent on taxable income of up to S$300,000.
  • The company, as a distinct legal body, shall not cease to exist if one or more of its shareholders die.
  • The ownership of the company can be changed, and additional shareholders may be added, thus increasing the capital injection for expansion of the business.
  • Financial interests of shareholders are covered as they are not individually responsible for the company's debts and losses.
  • Limited company coveys a professional involvement and vision, thus maximises the potential of loans from financial institutions and banks. It also builds a trustworthy reputation in the business community.
  • Changes in the shareholders or the pattern of holding do not affect the company and business operations.

Disadvantages of a Private Limited Company

Following are the disadvantages of a Private Limited Company:

Types of companies in singapore - Disadvantage of private company
  • It is driven by the rules laid down in the Singapore Companies Act. Violation of the laws and regulations would result in fines.
  • Annual returns and director's reports are required and must be filed, which entails the engagement of one director and one secretary in the company.
  • Increased disclosure and administration requirements, thus operational costs are usually higher.
  • The directors must give a greater disclosure of company information, including shares, debentures and contracts.  
  • Limited companies can be more costly to set up.
  • Limited companies must continue to comply with ACRA/IRAS.

Are there any Unlimited Companies?

Types of companies in singapore - Unlimited companies

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

Why a Company Register as Unlimited?

Types of companies in singapore - Why register as 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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