In Singapore, most companies are registered and operated as Private Limited companies. These companies are required to have the following suffix in their company names: “Private Limited”, “Pte Ltd”, or “Ltd”.
Private Limited companies in Singapore are commonly referred to as corporations, Incorporated, and limited liability companies. The registration process of Private Limited companies in Singapore is done through the Accounting and Corporate Regulatory Authority (ACRA).
Types of Private Limited Companies in Singapore
|Types of Private companies in Singapore|
|Private Limited Company||Public Company Limited by Shares|
|Not more than 50 corporate or individual shareholders||Can be more than 50 shareholders|
|Public Company Limited By Guarantee|
|Carries out non-profit making activities that have some basis of national or public interest|
- Private Limited Company
A Private Limited Company is a locally incorporated company. The maximum shareholders in a Private Limited Company are not more than 50. These companies have the policy to restrict the rights of the members to transfer their shares in the company.
The members can transfer the share only if they complete some of the requirements mentioned in the company’s policies. They have to take the approval of the company’s board of directors or the share they want to transfer must be first offered to be transferred to the existing shareholders.
- Public Company Limited by Shares
It is a locally incorporated company and the maximum number of shareholders ranges up to 50. The Public companies that are listed on the stock exchange are usually referred to as “listed companies”.
The company can offer the shares and debentures to the public to increase the capital. Before making any public offering of shares and debentures, the Public company must register a prospectus with the Monetary Authority of Singapore.
- Public Company Limited by Guarantee
A Public Company Limited by Guarantee has the national or public interest and carries out non-profit activities. It works as an art promotion or charity. The Public Company Limited by Guarantee may be approved by the Minister without the additional words of “Limited” or “Berhad”.
The Main Features of a Singapore Private Limited Company
The following are some of the main features of a Private Limited Company:
The benefits of a Private Limited Company
The benefits of a Private Limited Company in Singapore
The following are some of the advantages of setting up a Private Limited Company in Singapore, with which you can benefit yourself.
The drawbacks of a Private Limited Company
The Minimum Setup Requirements to register a Private Limited Company
The following are the requirements for the registration of a Private Limited Company
Incorporating Singapore Companies
To incorporate a company in Singapore the owners have to register it under the Companies Act. The company can have a minimum of 1 member either individual or corporation. The members of the company are referred to as shareholders.
A Private Limited Company is governed by the Singapore Companies Act. The company has to comply with the rules, regulations, and laws under the ACRA and Inland Revenue Authority of Singapore.
Singapore Company Name
The name of the company in Singapore must be approved by ACRA before its incorporation. The ACRA can reject the name of the company on the following basis.
- The company’s name is identical to any other existing company.
- It is undesirable.
- The ACRA can reject the names and trademarks which are similar to famous companies.
A Private Limited company must have at least one corporate or individual shareholder. The person can be the director and shareholder of the company. Anyone whether a local or foreign individual can be the shareholder. Details of the shareholders appear on public records. However, the Singapore Companies Act allows a minimum of 1 and a maximum of 50 shareholders in a Singapore Private Limited Company.
A Private Limited Company in Singapore must have at least one director. The director must be a citizen of Singapore or a Singapore permanent resident. The person who holds an Employment Pass or a Dependent’s Pass with a residential address in Singapore can also be the director of the company.
A Private Limited Company can have as many additional local or foreign directors as a company wants. The directors must be at least the age of 18 years and must not be bankrupt or have any criminal record in the past. Information of the directors must also appear on public records.
The following is a list of the reasons on which a person can be disqualified from the position of a company’s director:
- Any bankruptcy or person having a criminal record is not eligible for a director’s post.
- Persons who are under disqualification orders made by the Court.
- Persons involved in fraud or dishonesty acts.
Every Singapore Private Limited Company must have a competent Company Secretary. The secretary must be a resident of Singapore. According to the Singapore Companies Act, the companies should appoint a company secretary within six months of incorporation.
The company secretary is the officer of the company who shares legal responsibilities with the directors for certain tasks. The company secretary is also responsible for the efficient administration of a company. The secretary has to ensure compliance with statutory and regulatory requirements. He also ensures that the decisions of the board of directors are implemented.
The Appointment of Auditors
All the Singapore Private Limited Companies are required to appoint an auditor within 3 months from the date of incorporation. The Singapore Companies Act has now introduced a new scheme, according to which, the qualified companies can reduce the regulatory costs because they have fewer audit requirements to comply with. The following is the mentioned scheme of the Singapore Company Act:
- There is no requirement for the profit and loss accounts. The consolidated accounts and the balance sheets are audited by an approved auditor.
- No requirement to provide the members of the company with copies of the auditor’s report.
- The Company Act has no requirement to present copies of the auditor’s report at the Annual General Meeting.
Under this scheme presented by the Singapore Company Act, a company can be qualified as a “small company” and is exempted from the audit if it meets the following criteria:
1. The total Revenue should not be more than S$10 million.
2. The total Assets should not be more than S$10 million.
3. The total number of employees should not be more than 50.
Share Capital or Paid-up Capital
To register a Singapore company the minimum paid-up capital is S$1, or its equivalent value in any other currency. The minimum issued capital is one share par value. In Singapore, “Bearer” shares or “No par value” is not permitted.
After the incorporation of the company, the share or paid-up capital can be increased anytime. The issued share capital of the company is the total number of shares that exist in the company. It is then multiplied by the nominal value of each share.
The shares of a Private Limited Company can be transferred with the agreement signed between the seller and the potential buyer. According to the law, the shares of a Private Company cannot be offered to the general public.
Every Private Limited Company is required to have a registered office address. The registered address is not the usual business address but it can be sometimes the address of the company’s lawyers or accountants.
The registered company’s address must be a physical address. P.O. Box address has no value for the registration process. The companies can also use their residential address for certain types of businesses.
The government uses this address to send all the official letters and documentation therefore the address must be shown on all official company documents. If the company has changed the registered office address after incorporation, the new address can be notified to ACRA.
The company’s constitutional documents and provisions of the Companies Act governed the governance structure of the company and the interrelationship between the company and its shareholders.
The articles of association and the memorandum are now merged and renamed as a single document, called “Constitution”. All the existing companies that are incorporated before this law are not required to merge the document and can continue with their memorandum and articles of association.