Singapore Company Types

Introduction

Singapore is a thriving business hub and a popular destination for entrepreneurs looking to start a company. The country offers a variety of business structures to suit the needs of different types of businesses. In this blog post, we’ll explore the most common types of companies in Singapore.

Sole Proprietorship

A sole proprietorship is the simplest and most common type of business structure in Singapore. It is a self-employed person who owns and runs the business. The owner has unlimited liability for all debts and losses incurred by the business, and all profits are taxed as personal income.

The main advantage of being a sole proprietor is the ease of set up and low compliance costs. However, it is important to note that the owner is personally responsible for any legal issues and debts the business incurs.

Partnership

A partnership is a business structure where two or more people share ownership and management of the business. Partnerships are a popular choice for professional services firms such as law firms, accountants, and doctors. Partners share the profits and losses of the business and are personally liable for the debts and obligations of the partnership.

There are two types of partnerships in Singapore: general partnerships and limited partnerships. In a general partnership, all partners have unlimited liability for the debts and obligations of the partnership. In a limited partnership, there is at least one general partner with unlimited liability, and one or more limited partners with limited liability.

Limited Liability Partnership (LLP)

An LLP is a hybrid business structure that combines the benefits of a partnership with the limited liability of a company. It is a separate legal entity from its owners and has its own legal identity, which means that partners are not personally liable for the debts and obligations of the LLP.

LLPs are commonly used by professional services firms, such as law firms and accounting firms. LLPs must be registered with the Accounting and Corporate Regulatory Authority (ACRA), and they must file annual returns and financial statements.

Private Limited Company (Pte Ltd)

A private limited company is the most popular type of company structure in Singapore. It is a separate legal entity from its owners and has limited liability, which means that shareholders are not personally liable for the debts and obligations of the company.

Private limited companies must be registered with ACRA, and they are required to file annual returns and financial statements. The shares of a private limited company are not publicly traded, and ownership is restricted to a maximum of 50 shareholders.

Public Limited Company (PLC)

A public limited company is a company whose shares are traded on a stock exchange. PLCs are required to have a minimum share capital of S$50,000 and at least two directors. They are also required to have a company secretary and a compliance adviser.

PLCs are subject to more stringent legal and regulatory requirements than private limited companies, including the publication of annual reports and accounts and the appointment of auditors. They are also subject to greater public scrutiny due to their public status.

Summary

Choosing the right type of company structure is an important decision for anyone looking to start a business in Singapore. Each structure has its own legal and tax implications, and it is important to seek professional advice before making a decision. By understanding the different types of companies available, entrepreneurs and business owners can choose the structure that best suits their needs and helps them achieve their goals.

This article does not constitute legal advice.