Singapore Company Formation Choices

in Small-business

Undoubtedly, Singapore is now a familiar, not to mention popular, haven for business individuals who want to put their financial investments into good measure. Incorporating an entity in Singapore entails making a choice as to the type of business structure or entity is best suited to your needs. The company type you choose will determine all future actions you will perform with regard to your company such as the amount of taxes you will pay, the paperwork you need to prepare, the personal liability you expect to encounter, and the potential of your business to expand.

A foreigner who wishes to set up a company in Singapore can choose from three business types: a limited liability company, a sole proprietorship, and a partnership.

LIMITED LIABILITY COMPANY.  A Limited Liability Company (LLC) is essentially a company whose liabilities are limited only to the amount of share capital and has separate legal entity from its owners. Its liabilities likewise do not extend to the personal assets of its owners. An LLC may be private or public. A Private LLC is a company whose shares is held by not more than 50 persons and is not available to the general public. A Public LLC on the other hand allows its shares to be purchased by the general public and is usually listed in the stock exchange. It can be for profit and non-profit. Because of its advantages, an LLC is usually the preferred type of business entity by foreign companies. It is also the most recommended type of business entity in Singapore.

SOLE PROPRIETORSHIP. A Sole Proprietorship is a business structure whose shares are wholly owned by only one person. It is the simplest type of business structure but also the riskiest. This is because a sole proprietorship is not a separate entity from its owners. Thus, a sole proprietor can be held liable for all the debts of the company. His assets and properties cannot be protected from the company liabilities. If the company cannot pay for its debts, the sole proprietor, as the only owner, shall be held accountable even up to the extent of his personal assets. Because of this apparent drawback, this type of business structure is not very popular and not recommended.


PARTNERSHIP. A Partnership is a business structure involving two or more persons as co-owners or partners. It has no legal existence separate from its partners/owners. It is valid until terminated by the death, insolvency, incapacity or retirement of one partner. It may also be dissolved by the will of an unsatisfied or discontent partner upon due notice of termination to other partners. Partnerships can be of three types: General, Limited, and Limited Liability. A partnership is the most popular choice when it comes to companies offering professional service such as legal service, medical service, accounting service, or engineering and architecture service.

Choosing the kind of business structure to set up in Singapore depends on your particular situation and plans. In making your decision it is important that you consider all the pros and cons and the risks you are willing to take as far as personal liability as a company owner is concerned.

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Clarence Whiterson has 1 articles online

Rikvin offers business solutions for local and offshore investors and entrepreneurs. Our specialty is on  Singapore Company Registration, Singapore company formation and giving skilled services related to economics and administrative.  Rikvin specializes in the processing of work visas and services, as the candidate instructor, as a shareholder candidate test items, accounting, payroll and secretarial services. If you are interested in learning more about Rikvin’s Services kindly email us at info@rikvin.com or give us a call at +65 64838887.

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Singapore Company Formation Choices

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Singapore Company Formation Choices

This article was published on 2011/02/18