The starting point in doing business in Singapore is usually a decision on the type of entity that is best suited to the needs of the owners and other factors, such as:
In Singapore, a privately limited liability entity, also known as “company”, is one of the most popular form of business vehicle, though some may consider setting up a Representative Office or Limited Liability Partnership (LLP). Take a look at the comparison of various types and associated benefits of the individual entities.
We provide a comprehensive range of end-to-end services related to business formation, from the gathering of information to the eventual successful registration of the business. Depending on your needs, we are able to assist you on the following:
Our work does not end with business setup. All registered business entities are required to comply with various legislations. We assist you in navigating through the jungle of rules and regulations in Singapore through our services as “Corporate Secretarial Agents”.
One of the first steps of setting up a business in Singapore is deciding on the type of business entity. The following table provides a comparison over the four main forms of business entities:
Legal status |
Not a legal person |
Not a legal person |
A legal person (can enter into contracts, hold property, sue and be sued and exist irrespective of change of partners) |
A legal person (can enter into contracts, hold property, sue and be sued and exist irrespective of change of shareholders) |
Number of owners/ shareholders |
1 |
Minimum - 2 |
Minimum - 2 |
Minimum – 1 director and 1 shareholder |
Perpetual succession |
No |
No |
Yes |
Yes |
Liability of owner/ shareholder |
Sole proprietor has unlimited liabilities |
Partners have unlimited liabilities |
Not personally liable for the conduct of other partners or transactions or liabilities of the LLP unless is for his own wrongful acts or negligence |
Limited – the shareholder is not liable for the debts of the company |
Internal structure |
Complete flexibility |
Complete flexibility |
Complete flexibility |
A separation between owner and management |
Audited accounts |
No |
No |
No |
Yes (except exempt private company with turnover less than S$5 million or dormant company as defined in the Companies Act) |
Filing of financial statements with ACRA |
No |
No |
No |
Yes (with exception to private exempt companies) |
Filing of annual return |
No |
No |
No |
Yes |
Annual declaration of solvency |
No |
No |
Yes |
Yes – for exempt private company need only to report solvency status in the Certificate by an Exempt Private Company |
Compliance with the Financial Reporting Standards |
No |
No |
No |
Yes |
Appointment of a manager who is ordinarily resident in Singapore |
Yes |
Yes |
Yes |
NA |
Appointment of a company secretary ordinarily resident in Singapore |
NA |
NA |
NA |
Yes |
Income tax |
Where the sole proprietor is individual, his income from the sole proprietorship will be taxed based on personal income tax rate |
Where a partner is an individual, his share of income from general partnership will be taxed on personal income |
Where a partner is an individual, his share of income from LLP will be taxed on personal income tax rate |
Subject to a flat rate of 20% |
Termination of business |
Simple – file a notice of termination of business with ACRA |
Simple – file a notice of termination of business with ACRA |
Complex – must undergo legal procedures of winding up; cost on professional charges will have to be incurred; strike off application is available if the conditions stipulated by ACRA can be met |
Complex – must undergo legal procedures of winding up; cost on professional charges will have to be incurred; strike off application is available if the conditions stipulated by ACRA can be met |
Information is correct at the time of publication. The decision on the type of business entity is often a complex, multi-faceted one and it warrants the detail assessment of various factors. Henceforth, the information is presented “as is” only, and does not constitute any professional advice. Readers are urged to assess the suitability to their specific situation.
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