All businesses in Singapore need to be registered under ACRA. There are many company registration Singapore entities. However, the most common business entity in Singapore is a private limited company.
Do you intend to set up company in Singapore? If so, you need the service of a company registration Singapore agency. This registration company in Singapore can aid you to register private limited company Singapore. They provide a fast solution to your company registration Singapore needs.
However, before you register private limited company Singapore, let’s discuss what a private limited company is.
What is a private limited company?
A private limited company in Singapore is a type of limited liability entity. It is seen as a separate taxable entity from its shareholders and owners. This makes the shareholders not liable for company debts exceeding the capital they had provided. The maximum number of shareholders is 50. A corporation can be a shareholder of the private limited company in Singapore.
There are restrictions on transferring shares in a private limited company. It will need the approval of the board of directors. It is also required to transfer the shares to existing shareholders.
Pros and cons of a private limited company
Pros when you register private limited company Singapore
The biggest advantage of a private limited company is its status. Individuals who set up company in Singapore under private limits are considered committed. This means that the company will last for a long time. Thus, banks and loaning agencies will acknowledge the company highly if it loans a fund. Thus, if you register private limited company Singapore, you will have a high possibility of getting loans.
Another advantage is the tax incentives. One of the incentives is no tax charges on the first S$100,000 income. In addition, you can have tax rates such as 6% for sales amounting to S$300,000. There are some qualification requirements that you need to comply with to get this low tax percentage. Furthermore, the profits are taxed based on the corporate tax rate. There is no tax charged for dividends given to shareholders.
If a shareholder dies, a private limited company will not cease existence. It will continue operation even if there are some changes with the shareholders. That is because it is a separate entity from the shareholder. The personal assets of the shareholders will not be collateral even if the company goes into debt. Ownership can be transferred but needs the approval of the board. Similarly, a new shareholder will be appointed only if it is approved. As result, private limited companies can inject additional paid-up capital.
Cons register private limited company Singapore
The biggest disadvantage of a private limited company is the slightly strict rules in share transfer. A shareholder must seek approval to transfer the shares. Board members sometimes require transferring of shares be offered to the other shareholders first. A shareholder has no right to object if the board disapproved of the transfer of shares.
Strict rules are implemented when it comes to the directors of the company. It is compulsory for them to share vital company information. This includes their interests in contracts, shares, and debentures. The company must submit a director’s report along with annual returns. Thus, a private limited company obligated to have one Singapore resident director. In addition, one Singapore resident company secretary is also needed. As a result, there will be an increase in operating expenses.
You are obliged to continuously abide by the ACRA regulations. In addition, it is expensive to set up company in Singapore under private limited. Thus, you’ll need a large amount of capital, to begin with.
Basic requirements when you register private limited company Singapore
There are a lot of requirements you need to comply with if you set up company in Singapore. That is why hiring a company registration Singapore consulting agency is essential. However, there are a few company registration Singapore requirements that you should be aware of.
First, you need to have at least one shareholder. As mentioned earlier, you will also need one Singapore resident director and one Singapore resident company secretary. The initial capital should be at least S$1. Lastly, you’ll need to register a physical business address in Singapore. A P.O box is not a registered business address in Singapore.
How to register private limited company Singapore
You can register private limited company Singapore the same way you register other business entities. First, you need to get the company name approved before you set up company in Singapore. The company’s name should be unique and has no trademark discrepancies. It should also not have vulgar words. Furthermore, it should include the words “Pte. Ltd.” at the end of the name.
The second step to register private limited company Singapore is document preparation.
You will need to prepare the following documents.
ACRA-approved company name
Business activities short description
A registered business address in Singapore
Information on each company shareholder
Information on each company director
Information on the company secretary
Copy of Singapore identification card (if Singapore citizen)
Copy of passport (if foreign citizen)
Proof of overseas residency (if foreign citizen)
Copy of Memorandum & Articles of Associations (if foreign company)
All documents should be in English. If a document is not in English, you’ll need to include a translated version. The last step is to submit all of this to ACRA through BizFile+. Document preparation is the most grueling step of all. That is why if you plan to register private limited company Singapore, you’ll need a company registration Singapore agency.
Let’s register your private limited company in Singapore
In this article, we covered what a private limited company is. We also discussed its pros and cons. We mentioned the company registration Singapore requirements, as well as how to register private limited company Singapore.