A company is a corporate body formed under special registration rules. In Singapore, the incorporation of a company begins with submitting the application form to the Accounting and Corporate Regulatory Authority (ACRA). The process for this type of startup business is complex, and it does require assistance from experts.
An entrepreneur has many options when it comes to choosing the type of company to set up here in Singapore, entrepreneurs can form a one-person company or a joint venture company with two shareholders. There is also the option of setting up a private company that enjoys limited liability protection.
An entrepreneur needs to understand their requirement before Company incorporation Singapore because each type has different features and benefits. Entrepreneurs can choose from the following types of companies:
A private company limited by shares is a new type of business incorporated on or after 14 Jan 2010. This form of startup business offers limited liability protection. The regulations and laws governing the setting up and running of such companies are very stringent, making it difficult for less scrupulous people to break the rules. This is because such laws and regulations are aimed at protecting shareholders’ interests.
Joint-venture company – this form of startup business has two shareholders who might be individuals or other companies. Parties interested in forming a joint venture should choose this option if they desire to share the costs and responsibilities that come with running a company. It should be noted that each party contributes to the startup capital and will be sharing in the profits. Parties should carefully consider other factors like the division of labor, secretarial duties, and other administrative tasks before deciding on forming a joint venture entity.
One-man company – this type of business is only suitable for entrepreneurs who are interested in running their business themselves. This form of startup business offers limited liability protection. The regulations and laws governing the setting up and running of such companies are very stringent, which makes it difficult for less scrupulous people to break the rules.
Public company – this type of company is suitable for entrepreneurs whose business requires more capital in order to start operations. It should be noted that public companies are required to comply with a set of statutory requirements that govern the operation and management of such companies. Public companies require more experienced directors and officers as well as auditors to oversee their day-to-day business activities.
Close corporation – this is another form of business incorporated on or after 14 Jan 2010, which offers limited liability protection. In order to set up a close corporation, entrepreneurs must satisfy the ACRA that they are bona fide and reputable.
Corporation sole – this form of business is usually used by churches in Singapore. It is best suited for organizations with large assets or when the organization’s objectives require special statutory protection. The designation of corporation sole also relieves people of the responsibilities of being trustees.
Limited liability partnership – this is a new form of business incorporated on or after 14 Jan 2010, which offers limited liability protection for its partners. The regulations and laws governing the setting up and running of such companies are very stringent, which makes it difficult for less scrupulous people to break the rules.
It is recommended that entrepreneurs do their own research on the various types of Company incorporation Singapore before making up their minds. They should also ensure that they are adhering to all guidelines and regulations pertaining to these types of businesses, especially if the company is engaged in carrying out financial transactions.