subject: Setup a Singapore Company: Types of Business Entities Available in Singapore [print this page] Setup a Singapore Company: Types of Business Entities Available in Singapore
In today's businesses, conducting a thorough study or completing a feasibility study is one of the most common things employed before any decisions are made. Ideas in choosing the right business structure is included in any feasibility study because it has been observed that a right business structure contributes to business success when it comes to incorporating a company. Remember that your choice can affect your business's image and reputation among clients and banks, administrative procedures, taxes, personal liabilities as well as the ability to expand your company operations.
To be able to achieve a good company decision and easily select a right business entity for your business success, we have prepared the list of Singapore's business structures and provided a brief description for each.
This list will definitely guide you as you setup a Singapore company.
1. Private Limited Company. A Private Limited Company is the most flexible and advance business structure in Singapore. It is also the most preferred form of company incorporation in Singapore as it protects its owner's personal assets from liabilities incurred by the company as well as enjoys tax incentives and exemptions.
2. Sole Proprietorship. A sole Proprietorship is a business set up owned by one person who exercises decisive authority and responsibility of all assets and liabilities belonging to the business.
3. Partnerships. A partnership eases the limitations of business expansion of a sole proprietorship by allowing two or more people to establish and co-own a business. With this business setup, you and your partner can acquire capital, talent and strategic assets based on mutual terms. Partnerships do not enjoy tax incentives and exemptions given to Private Limited Companies.
4. General Partnership. A General Partnership acts very much like Sole Proprietorship because all partners are personally liable for all debts and liabilities incurred during the course of business. It is advisable for partners to approach a lawyer and draw up a Partnership Agreement that helps define the role, responsibilities and profits due to each partner. Each partner can also be held responsible for the actions of another partner.
5. Limited Partnership. A Limited Partnership requires a minimum of at least one active (general) partner and one dormant (limited) partner.
6. Limited Liability Partnership. Introduced in 2005 by the Singapore government, the LLP business structure is highly suitable for chartered professionals who decided to work together. This model combines a partnership entity that protects co-partners from liabilities that may arise from willful misconduct or gross negligence of one partner or a group of partners.
7. Branch Office. The Branch Office is an extension of the foreign company without a distinct legal identity.
8. Singapore Representative Office. Setting up a Singapore Representative Office is a good way to explore potential business opportunities before making a decision to set up a Branch Office in Singapore. Representative Offices are not allowed to engage in commercial revenue-generating activities.
9. Singapore Subsidiary Company. The subsidiary of a foreign company is considered a resident company, and therefore is entitled to tax exemptions and incentives as other locally incorporated companies in Singapore.
