Incorporating a Company in Singapore: A Guide to Understanding the Different Types of Business Entities
Singapore is a popular destination for businesses due to its favorable business environment, low tax rates, and highly developed infrastructure. If you are considering incorporating a company in Singapore, it is essential to understand the different types of business entities available. This article provides a comprehensive guide to help you make an informed decision.
What is a Company?
A company is a business entity that is registered with the Singapore Company Registration (ACRA) and has a separate legal identity from its shareholders. There are several types of companies, each with its own set of characteristics and benefits. Here are the most common types of companies:
Private Limited Company (Pte Ltd)
A private limited company is the most common type of company in Singapore. It is also known as a Pte Ltd company. This type of company has a minimum of one shareholder, which can be an individual or a corporate body. The liability of the shareholders is limited to the amount of share capital they have contributed to the company. The company is required to have a minimum share capital of SGD 1,000, which can be paid in cash or kind.
Public Limited Company (PUB)
A public limited company, also known as a PUB, is a type of company that is listed on a stock exchange. It is required to have a minimum of 50 shareholders, and the shares can be traded on the stock exchange. The liability of the shareholders is unlimited, and the company is required to have a minimum share capital of SGD 500,000.
Exempt Private Company (EPC)
An exempt private company, also known as an EPC, is a type of company that is not required to file its financial statements with the ACRA. It is required to have a minimum of two shareholders and a paid-up capital of at least SGD 1,000. The liability of the shareholders is limited to the amount of share capital they have contributed to the company.
Section 115 and 116 Subsidiary Company (Subsidiary)
A section 115 and 116 subsidiary company is a type of company that is wholly-owned by another company. It is required to file its financial statements with the ACRA, but it is not required to hold an annual general meeting.
How to Incorporate a Company in Singapore
Incorporating a company in Singapore is a relatively straightforward process. Here are the steps to follow:
- Choose a company name that is unique and not already registered with the ACRA. The name should not be similar to an existing company name or a name that is likely to be confused with an existing company name.
- Prepare the constitution (also known as the articles of association) that outlines the rules and regulations of the company.
- Register the company with the ACRA by submitting the required documents, including the company name, constitution, and share capital.
- Pay the registration fee, which is currently SGD 300.
- Obtain a business registration certificate from the ACRA.
- Open a bank account in the name of the company.
- Register for goods and services tax (GST) if the company is required to do so.
- Register for employment centralised payroll (EPF) and Central Provident Fund (CPF) if the company has employees.
Conclusion
Incorporating a company in Singapore can be a complex process, but with the right guidance, it can be a smooth and successful experience. It is essential to understand the different types of business entities available and choose the one that best suits your business needs. With the right information and guidance, you can make an informed decision and ensure the success of your business.
FAQs
Q: What is the minimum share capital required for a Pte Ltd company?
A: The minimum share capital required for a Pte Ltd company is SGD 1,000, which can be paid in cash or kind.
Q: What is the minimum number of shareholders required for a public limited company?
A: The minimum number of shareholders required for a public limited company is 50.
Q: What is the difference between a private limited company and a public limited company?
A: The main difference is that a private limited company has a minimum of one shareholder, while a public limited company has a minimum of 50 shareholders. A public limited company is also required to be listed on a stock exchange, while a private limited company is not.
Q: What is the purpose of the constitution (articles of association) in a company?
A: The constitution, also known as the articles of association, outlines the rules and regulations of the company and is essential for the smooth operation of the company.
Q: What is the registration fee for a private limited company in Singapore?
A: The registration fee for a private limited company in Singapore is currently SGD 300.
Q: What is the purpose of the business registration certificate?
A: The business registration certificate is evidence of the company’s registration with the ACRA and is required for various business transactions.
Q: What is the minimum share capital required for an exempt private company?
A: The minimum share capital required for an exempt private company is SGD 1,000, which can be paid in cash or kind.
Q: What is the minimum number of shareholders required for an exempt private company?
A: The minimum number of shareholders required for an exempt private company is two.
Q: What is the difference between a section 115 and 116 subsidiary company and a private limited company?
A: The main difference is that a section 115 and 116 subsidiary company is wholly-owned by another company, while a private limited company can have multiple shareholders.
