The most popular type of business in Singapore is a Private Limited Company due to its ease and simplicity of incorporating.
What is a Private Limited Company
A limited company in Singapore means it is limited by shares. It is also considered as a separate legal entity from its shareholders. A limited company is recognised as a taxable entity, which means shareholders are not liable for any of the debts and losses except for the amount of share capital.
How do I incorporate a Private Limited Company in Singapore?
This article will be useful to you if you are looking to form a Private Limited company in Singapore. We at Crystal Clear provide services to support you with the formation of your business.
The Accounting & Corporate Regulatory Authority (ACRA) is where a firm that wants to do business in Singapore should register. Under the Ministry of Finance, ACRA is the statutory authority that controls how a business should be formed in Singapore.
Here are the basic requirements of forming a Private Limited Company:
- 1 company secretary
- 1 resident director
- A physical office address in Singapore
- At least 1-50 shareholders – which may be an individual or a corporate entity
- A minimum initial paid-up share capital of S$1
What do you need to set up a Singapore Private Limited Company
A company name
All organisations wishing to register in Singapore must come up with a distinctive name. Any name that is already in use will be rejected. As a result, it’s critical to pick a name for your business carefully. In Singapore, your company name could become your brand. Before it may be incorporated, the company must first obtain ACRA permission.
The name should be simple to read, one-of-a-kind, and free of any vulgar or profane words. When it comes to choosing a company name, there should be no copyright issues or trademark infringement concerns.
Some company names require specific permission from a third party. This covers words like media, finance, bank, finance, and education, among others.
After a company name is approved, it is reserved for 60 days from the date of application filing. Following approval, you should proceed with company registration in Singapore within the stipulated time frame.
What kinds of business operations do you intend to engage in? The Singapore Standard Industrial Classification Code 2010 covers all commercial operations in Singapore. This is the code that governs the types of commercial activity you are permitted to engage in.
Memorandum & Articles of Association
Another key stage in starting a business in Singapore is to draft a Memorandum & Articles of Association (MAA). The Singapore Business Registrar can provide you with a basic MAA document that outlines the rules that govern company management and activities.
The incorporation request must be filed and approved by ACRA before a Private Limited company can be formed in Singapore. ACRA sends an email with the registration number and confirmation of incorporation. If the incorporation documents are ready and signed by all parties concerned, the process can be finished quickly. The email serves as a soft copy of the certificate of incorporation.
If a hard copy is required, a Singapore-incorporated firm can submit an online request to the authority. A small fee will be charged for this service.
A good shareholder agreement should be in place at the company. This is necessary to avoid any potential conflicts.
Shareholding pattern & Shareholder Details
In Singapore, a private limited corporation must issue at least one subscriber share to its founding members. You must have at least one individual or corporate shareholder.
Company secretary details
Within six months after its incorporation, a Singapore Private Limited company must have a company secretary.
Company Business Profile
Only when a Singapore company receives an email from the Singapore Company Registrar does it receive confirmation of establishment. The government issues a Unique Entity Number to any Singapore incorporated company, which is included in the email.
A nominal fee can be paid for a business profile that includes the firm name, registered address, formation date, registration number, paid-up capital, business activities, and details of shareholders, company secretary, and directors.
A director with a residential address is required for a limited company in Singapore. They must be a Singaporean citizen, Permanent Resident, or on an Entrepass work visa to qualify.
Registered Address Details
In order to be incorporated in Singapore, a company must have a registered address. All official correspondences are sent to this physical address and a P.O. Box cannot be used as the registered address.
Unless exempted from auditing rules, all Singapore-incorporated firms must appoint an auditor within three months after establishment. The company must have less than 20 individual shareholders and no corporate shareholders to qualify for an exemption. In addition, the yearly turnover of the company should not exceed S$5 million.
This is a document that proves who owns the company’s stock. The certificate serves as verification of each shareholder’s share allocation. The certificate must be issued by the company secretary.
First Board Resolution
The resolution confirms the official appointment of shareholders and directors.
Bank Account Opening Resolution
Because the company is considered as a separate legal entity, it needs its own bank account. The Board of Directors approves the account opening and names the account signatories.
The choosing of a corporate bank account is vital for the creation of the organisation. With so many banking partner options, the application process and requirements may differ from one private bank to the next.
In order to open an account, you will need:
- The Resolution passed by the BOD sanctioning the opening
- Proof of the incorporation certificate
- Copy of the business profile
- Proof of the MAACopy of the passport
- Proof of residential address
The next stage after registering a company in Singapore is to fulfil all post-incorporation duties, including:
- Opening a corporate bank account
- Securing necessary business licenses applicable to the company’s activities
- Getting an office space
- Recruiting staff if needed
- Setting up a bookkeeping system for managing the financial affairs of the company or engaging the services of a professional accountant.
It is critical to select a Company Secretary within six months of incorporation in Singapore, as required by the Singapore Companies Act. The company secretary must be a Singaporean who lives in Singapore “on a regular basis.” The company secretary is an official having legal responsibilities and may share their responsibility for certain tasks with the directors.
One of a company secretary’s main responsibilities is to efficiently operate the company. This involves ensuring that all legal and regulatory obligations are met. A secretary is responsible for ensuring that the board of directors’ decisions are carried out properly.
Company license and permit
Depending on the company’s business activity, you may need to obtain one or more licences and permits. Before beginning business operations, a newly incorporated firm must get a licence. However, not all forms of commercial activity require a licence. A licence is only required for a few operations. Travel agencies, cleaning, import/export services, restaurants, educational institutions, and financial services are all examples of this.
A company that expects to make more than S$1 million in annual revenue must register for GST. In Singapore, an indirect tax is collected on the consumption of goods and services. A GST-registered business must charge a 7% GST rate to its customers for goods and services.
We’re here to assist entrepreneurs in starting or continuing their business in Singapore! Reach out to us to understand more on the services Crystal Clear offers.