A Private Limited Company is the most popular type of business structure in Singapore due to its ease of incorporation and simplicity.
What is a Private Limited Company's definition
In Singapore, a Private Limited company is one that is limited by shares and regarded as a separate legal entity from its shareholders. A limited company is recognised as a taxable entity, thus shareholders are only accountable for the share capital when it comes to debts and losses.
How can I start a Private Limited Company?
You can use the information in this article to set up a Private Limited Company in Singapore. Starboard provides services to help you launch your business.
A company that intends to conduct business in Singapore should register with the Accounting & Corporate Regulatory Authority (ACRA). ACRA, a statutory body under the Ministry of Finance, is in charge of regulating how businesses should be established in Singapore.
The following are the prerequisites for establishing a Private Limited Company:
- One resident director (local citizen or a PR)
- One company secretary
- A registered business address in Singapore
- A minimum of 1 to 50 shareholders, who may be either natural persons or legal entities
- A minimum of S$1 initial paid-up share capital requirement
How to Form a Singapore Private Limited Company - What You Need to Know
Your Entity Name
All businesses seeking to register in Singapore are required to choose a unique name. Any name that has already been use will not be accepted. Hence, choosing your company name wisely is crucial.
The name should be easy to understand, unique, and devoid of any obscene or offensive language. There shouldn't be any concerns about trademark infringement or copyright difficulties while choosing a company name.
Certain corporate names necessitate special consent from a third party. This includes, among other things, words relating to medical, finance, bank and education.
A company name is reserved for 120 days following approval from the application filing date. Following approval, you must register your company in Singapore within the allotted period after.
What types of business activities do you plan to conduct? All business activities in Singapore are classified according to the Singapore Standard Industrial Classification Code (SSIC) of 2020. This code establishes the kinds of commercial activities that you are allowed to engage in.
Constitution/Memorandum & Articles of Association
The Constitution is a set of rules that governs the company. It states the rights and responsibilities of the directors, shareholders and company secretary. The Constitution is also sometimes known as the Memorandum & Articles of Association(MAA).
The preparation of a Constitution is yet another crucial step in launching a business in Singapore. You can obtain a model Constitution from ACRA.
A shareholder agreement is a legal document that outlines the shareholders' rights and obligations. While this is not a mandatory step in the process, we strongly encourage companies to have a shareholder agreement in place. This is necessary to avoid any potential conflicts that may arise in the near future.
Shareholder Information and Shareholding pattern
A Private Limited Company in Singapore is required to offer its founding members a minimum of one subscriber share. A minimum of one individual or business shareholder is required.
The Singapore Companies Act mandates that a company appoints a Company Secretary within six months of its incorporation. A Singaporean who "regularly" resides in Singapore is required to be the Company Secretary.
Operating the business effectively with the Director is one of the Company Secretary's primary duties. This entails making sure that all statutory and regulatory requirements are met. The proper execution of the Board of Directors' decisions is the responsibility of the secretary.
Local Director's Information
In Singapore, a Private Limited company needs a Director with a residential address. To be eligible, a person must be a Singapore citizen, a permanent resident, or have an Entrepass work visa.
Details of Registered Address
A company must have a registered address in Singapore in order to be incorporated and cannot be a P.O. Box.
Appointment of an auditor, if not exempted
All Singapore-incorporated businesses must appoint an auditor within three months of their incorporation, unless they are excluded from auditing regulations. For the company to be eligible for an exemption, there must be fewer than 20 individual shareholders and no corporate shareholders. Additionally, the company's annual turnover should not go over S$5 million.
Certificate of Shares
This document serves as evidence of stock ownership in the firm. The certificate serves as evidence of the share allotment for each shareholder. The company secretary is required to issue the certificate.
The resolution attests to the shareholders' and directors' legal appointments.
Bank Account Resolution
The corporation needs its own bank account because it is regarded as a separate legal entity. The account opening is authorised by the Board of Directors, who also designates the account signatories.
For the establishment of the organisation, selecting a corporate bank account is crucial. The application procedure and requirements may vary from one private bank to the next because there are so many banking partner alternatives.
You'll need most of the following to open an account:
- The Board of Director's decision to approve the opening was made in a resolution
- Evidence of the certificate of incorporation
- A copy of the company profile (BizFile)
- Evidence of the MAA/Constitution
- Identity documents (NRIC for locals & PRs, passport for foreigners
- Proof of a home address
After a company is registered in Singapore, the following steps should be taken:
- Establishing a business bank account
- Obtaining the business permits required for the activities of the company
- Obtaining a workspace
- Hiring personnel if necessary
- Putting in place an accounting system or hiring an accountant
Licenses and Permits for Businesses
You might need to apply for one or more licenses and permits depending on the commercial activity of the company. A newly formed company must obtain a license before starting its operations. But not every type of commercial activity needs a license. Only a few operations necessitate the use of a license. Examples of these include cleaning services, restaurants, banking institutions, travel agencies, and import/export businesses.
Registering for GST
A business must register for GST if it anticipates generating more than S$1 million in annual revenue. In Singapore, consumption of goods and services is subject to an indirect tax. A company that has registered for GST is required to charge its clients 7% GST on all goods and services.
We're here to support business owners as they launch or expand in Singapore. To learn more about the services Starboard provides, get in touch with us!