Unlocking the
Potential of Companies in Singapore

When it comes to establishing a business in Singapore, one of the most popular and versatile options is forming a company. Companies offer distinct advantages, including legal separation from shareholders and directors, limited liability, and a clear framework for governance. In this comprehensive guide, we’ll explore the essential aspects of companies in Singapore, covering ownership, legal status, registration, taxation, and more.

Ownership:

Companies in Singapore can take different forms based on their ownership structure:

  • Exempt Private Company: Limited to 20 members or less, with no corporation holding beneficial interest in the company’s shares.
  • Private Company: Limited to 50 members or less.
  • Public Company: Can have more than 50 members.

Legal Status:

Companies are recognized as separate legal entities from their members and directors:

  • Members (shareholders) enjoy limited liability, protecting their personal assets from business debts and losses.
  • A company can initiate legal actions or be subject to legal actions in its own name.
  • Unlike some other business structures, companies can own property in the name of the company.
  • Members are not personally liable for the company’s debts and losses.

Yearly Statutory Obligations:

Operating a company in Singapore involves specific annual obligations:

  • Companies must appoint a company secretary within 6 months of incorporation.
  • An auditor must be appointed within 3 months after incorporation, unless the company qualifies for exemptions from audit requirements.
  • Annual returns must be filed, and statutory requirements for general meetings, directors, company secretary, share allotments, and more must be complied with.

Registration Requirements:

To establish a company in Singapore, certain registration criteria must be met:

  • At least one shareholder is required.
  • At least one director must be ordinarily resident in Singapore, aged at least 18 years.
  • Foreign individuals who wish to act as local directors can apply for an EntrePass from the Ministry of Manpower.
  • Undischarged bankrupts are ineligible to be directors and cannot manage a company without approval from the Court or the Official Assignee.

Taxes:

Taxation for companies in Singapore follows specific rules:

  • Profits are taxed at corporate tax rates, providing potential tax advantages for businesses.

Continuity in Law:

A company enjoys perpetual succession until it is wound up or struck off, ensuring its continuous legal existence.

Closing the Business:

Closing a company can be done through two primary avenues:

  • Winding up can be voluntary, initiated by members or creditors, or compulsory, ordered by the High Court.
  • Striking off is another option for closing a company.

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