12 Point Checklist for Business Incorporation in Singapore
Table Of Contents
Registering a Singapore company? Here’s the only company registration checklist guide you’ll ever need. The following Singapore company registration checklist will help you to incorporate a company and improve your incorporation process in Singapore:
1. Select The Legal Form For Your Company
The following are the most common forms of legal business entity in the company incorporation services:
At least One Shareholder
Singapore companies require at least one shareholder or local director for Singapore corporations to operate. So as you form your company, decide how many shares to issue to shareholders and in what proportion, especially if there are non-residents.
Most founders, foreigner or not, frequently issue their stock. What’s essential about each share is the total percentage you own, not the number of shares. Also, sharing a specific certificate of incorporation, which are issued to shareholders, serve as evidence of ownership.
More shares can be issued as the company grows, allowing the corporation to raise additional funds to run its operations.
A General Partnership
A general partnership in Singapore may contain anywhere from two to twenty partners. Like a sole proprietorship, a general partnership holds each partner and local director personally accountable for the company’s debts and liabilities.
A Limited Partnership
General partners can add limited partners to a limited partnership. However, small and medium-sized partnerships in Singapore usually avoid limited partnerships for two reasons:
The general partner has absolute authority over the company’s management. But they also bear personal responsibility for the company’s liabilities and debts.
Limited partners are only liable for the money they put into the company, and they are not allowed to participate in its management.
A Limited Liability Partnership (LLP)
An LLP is a mixture of an incorporated company and a partnership.
A partner in an LLP is only personally accountable for liabilities and debts deriving from their wrongdoing or negligence, not for the entire firm’s debts and liabilities. Because of that, the share of liability of shareholders is “limited.”
Typically, an LLP Singapore company is formed by a group of two or more particular directors or shareholders, such as attorneys, architects, doctors, or accountants, who want to establish a joint practice.
A Company
In Singapore, a company is a legal entity distinct from its owners and shareholders. That means only the company can possess property, be sued, sue, and make contracts on its behalf, not the shareholders or owners.
The firm is also accountable for its data, information, debts, and responsibilities, whereas its owners are often not. And that’s because the company incorporation has its own legal identity, and the shareholders have limited liability.
A Business Trust
A business trust, like a company advanced by the company secretary, runs and manages a company with a registered office. However, there are other ways in which business trusts differ from corporations.
First, unlike a regular Singapore company, a business trust is not a legal entity in its own right. Instead, the trustee-manager holds legal ownership of the trust assets and manages them for the benefit of the trust beneficiaries.
Second, per their constitution, trusts are not limited to paying dividends to shareholders from their accounting profits. Business trusts can pay distributions to their shareholders from their additional operating cash flows. As a result, a business trust’s distribution per unit (DPU) may exceed its earnings per unit.
2. Select The Company Name of The Singapore company
You have to select a company name for your Singapore firm incorporation. However, ACRA must approve the company name in Singapore before you can register a Singapore company.
The Accounting and Corporate Regulatory Authority (ACRA) is a Singapore government statutory board that reports to the Ministry of Finance. The ACRA is Singapore’s national regulator for public accountants, companies, and a corporate secretary.
The ACRA can decline a company’s name during Singapore company formation on the following grounds.
It is undesirable, according to the Corporate Regulatory Authority.
The company name is similar to that of other businesses.
The ACRA can reject names and trademarks identical to famous companies.
3. Write Your Business Plan For Your Company in Singapore
Like everywhere else, you need to create a plan to start your business in Singapore when you want to register a company, whether it’s a private limited company or a trust. Set your short-term and long-term goals, mission, and vision, and create critical milestones. It will enable you to track and monitor your Singapore company’s progress.
A business plan is also essential for the company to furnish the banks, potential investors, suppliers, company secretary, and trade partners, whether they’re abroad or in Singapore.
It will secure loans and credit facilities for your company. A business plan will give them the idea that you have solid grounds for your firm that will result in visible economic activities.
4. Memorandum And Articles of Association (M&AA)
The constitutional documents of companies are also necessary before starting a venture in Singapore. These documents include the Memorandum and Articles of Association.
They help create the critical characteristics of business activities and determine how the company is regulated and how the company members, such as the corporate secretary, accountant, resident director, company secretary, and others, interact.
Each Singapore Company must have an M&AA. You can either have the designed M&AA from the Companies Act or can create one for you.
Requirement For Company Memorandum
The memorandum of the company specifies the company’s characteristics and must have the following:
The name of your Singapore company
The details about the company’s share capital
The full names, an office address, and occupations of the subscribers to the memorandum
A statement that indicates the subscriber’s desire to form the company and their agreement to take up shares in it.
The Articles of Association
The Articles of Association contain provisions that regulate Singapore companies’ internal management. The companies are free to create content for their articles.
But the Articles of Association usually deal with the following company matters:
The problems of share capital and the variation of rights of the shares
Liens and calls on shares, and transmission and loss of shares
The incorporation process of general meetings of the company.
The legal effects of Memorandum and Article of Association
The M&AA is considered a statutory contract between the company and its essential members like the corporate secretary and accountant. The contract also stands between the company members and binds the new members appointed to the company after its incorporation.
If the company or a member is not complying with the Articles, it may result in procedural irregularity. If the non-compliance is by a company, then a member can obtain a declaration to make the company comply.
However, if the non-compliance is by a member, then another company member can obtain the declaration for damages.
5. Incorporation of The Company
Company incorporation in Singapore will provide you with a registration number that will allow you to open your company bank account and registered address, see your IRAS, Central Provident Fund, and other legal and regulatory matters.
When you incorporate a company in Singapore, it might take as little as a day. However, if the government must get the application for approval, it may take two weeks to two months.
Refusal by Registrar
Nevertheless, the Registrar may refuse to register a prospective company in Singapore submitted under the Companies Act if the company is likely to be:
Detrimental to Singapore’s good order, public peace, or welfare.
Against the national security or interest
Utilized for unlawful purposes.
You may appeal to the Minister, whose judgment is final, within 30 days of the date of the Registrar’s decision.
6. Open Your Company Bank Account
For a person to open a bank account during Singapore company incorporation, you have to select a preferred bank, which you can do with the help of your Singapore company secretary. Then, search for the best banks in Singapore that meet your requirements and is close to your registered address in Singapore.
Documents Required in Singapore
Generally, when opening a company bank account, the authorities will require the following from companies:
A copy of your company’s business profile
A copy of the certificate of incorporation
Copies of all firm directors’ passports or Singapore national identity cards
A company’s board of director’s resolution
A copy of your company’s M&AA
Proof of the directors’ and company’s ultimate beneficial owners’ residence addresses
However, there are several factors you need to consider:
The total amount of money you intend to deposit with the bank.
How many banking transactions do you expect?
The bank’s requirement on the company account’s minimum balance.
What other financial services does your company require?
Ease of making transactions
The currencies you’ll transact in.
Singapore Company And Bank Account
Opening a bank account is a pretty basic and straightforward process in Singapore. However, this may not be the case for a foreign-owned organization or individual because data verification is neither practicable nor readily available.
Hence, banks must collect more thorough information on their foreign clients upfront and follow a more stringent approach.
The background of the company promoters, the complexity of the legal structure, representative clients and suppliers, the geography and nature of business activities, and the profile of transactional activity are all criteria that banks will consider when assessing a client’s risk profile.
So your ability to give the bank all relevant information will be critical to a successful account establishing the process for any Singapore company registration.
7. Lease an Office, Warehouse, or Retail Space
You probably have arranged a significant amount from your paid up capital for the rental expenses when planning your business activities for the first few months. Generally, a company has to pay the property owner a three-months-rent. The one month’s rent is for the first month’s payable rent, and the other two month’s rent is for the security deposit.
It’s ideal for some companies to purchase the property rather than rent it. Specifically, the companies who are planning long-term ventures should purchase the property.
It can save their monthly expenses, and at the end of mortgage payments, the company would own the land.
8. Obtain Licenses and Permits
When you register your company in Singapore with the ACRA, you may be required to get a license and (or) permit, depending on the type of venture you want to start.
During the application for name approval, ACRA’s automated system will identify whether another authorizing authority is required to give a business license or permit.
Although most businesses don’t require business permits or license to operate, a few must since the authorities regulate them.
Companies Require Permits & Licence
The following business entities may require a license or a permit to run their company legally: advising on finance, investments, capital markets, and other financial activities, the preparation of meat or food products, broadcasting and publishing, and the sale of alcohol and tobacco or explosives.
The following business fields also need licenses: building contractors, banks, insurance carriers, accountants, lawyers, travel agencies, private schools, moneylenders, liquor distributors, banks, importers or exporters, daycare centers, wholesalers, and real estate agents.
9. Tax Registration of Goods and Sales
The following business entities need to register their company for GST:
· Companies with more than $1 million taxable turnovers for the past four quarters.
· The company is currently making sales, and the expected taxable turnover in the next 12 months is more than $1 million.
In such a situation, you may need to apply for the GST registration within 40 days of the date on which your registration liability arises.
You can also register for GST voluntarily if you feel your firm can allow you to do so.
10. Hire Competent Employees
Before hiring any employee or hiring yourself as a full or part-time employee, you need to consult the labor laws of Singapore, known as the Employment Act, and its regulations.
You have to register under the government authorities like the Ministry of Manpower and the Central Provident Fund.
The Central Provident Fund contributions are necessary for any employee working in Singapore who earns at least $50 a month. The Singapore resident employees are also eligible for other liabilities like Medisave contributions. If you hire more than one employee, you must set up a system processing payroll for your employees.
Insurance For Company in Singapore
According to the Work Injury Compensation Act, you may also need to obtain insurance for certain employees, whether your company constitution says so or not.
The employers must maintain work injury compensation insurance for all the employees involved in manual work and non-manual employees earning less than $16,000 a month.
If an employer can’t perform the insurance duties, he has to deal with the penalty of a fine of $10,000 or imprisonment of up to 12 months.
Insurance Criteria
It’s unnecessary to maintain the insurance for a non-manual worker earning more than $1,600 a month. However, if the employee claims for the insurance, you have to compensate the employee accordingly. Employers can utilize more than one insurance policy to cover the liabilities under the Work Injury Compensation Act.
11. Set up an Accounting And Record-Keeping System
The company must have to set up an Accounting and corporate regulatory system. In this way, they will be able to easily comply with the laws and regulations regarding taxes, filings, and other submissions to the authorities.
The company has to keep its documents for a certain period. These documents include a list of crucial principals and their addresses, copies of all incorporation documents, financial statements, annual reports, changes to the company’s register, etc.
Your company’s records can be preserved electronically or manually to allow easy and proper auditing.
If your documents are preserved on paper, they should be readable and well-organized. Photocopies should be created if receipts printed on thermal paper fade over time.
If your records are held electronically, be sure you have sufficient internal controls to ensure their completeness, integrity, and reliability. For example, you can state how to retain records, how picture captures should be saved, or when and how papers should be filed and stored in a database.
Storage Recommendations
You can refer to the First Schedule of the Evidence (Computer Output) Regulations for storage recommendations for imaged business records.
You should also have security measures to ensure that the records are not tampered with. For example, you don’t need to preserve physical copies of source documents to prove your business transactions for tax purposes if your records are kept online.
12. Maintain Your Business Identity And Ensure Your Presence
You may have already developed a domain name for your company. You have to build a corporate website or hire a professional to create and run your website.
Additionally, you can also create your business cards, brochures, letterhead, and other promotional items. These marketing strategies will help your business to thrive fast.
You can hire a professional to create a business logo for you. It’s highly beneficial in the long run, so you can easily invest some money in them. These marketing strategies are essential to make your business stand out in the business marketplace.
Once you have all these items, you can take your company in the market depending on your focused business and marketing plans.
Conclusion
When determining where to base yourself, incorporating in Singapore is a good option. Solid labor markets, a stable economy, and business-friendly tax rules allow you to get up and run faster, spending less time wrapped in paperwork and more time expanding your company constitution.
As you start your company in Singapore, go over this checklist to ensure you’ve covered all the bases like permanent resident address, company constitution, etc. Of course, you can always hire professional firms to address some areas of your incorporation process that you are unsure about handling on your own.
