subject: Form A Singapore Company Essentials [print this page] The International Finance Corporation's Ease of Doing Business 2010 listed Singapore as the leading economy in employing workers and trading across borders. Singapore has already proved its business capabilities within the international business association long before globalization re-defined commerce.
Several essential aspects contributed to making Singapore the most ideal spot for businessmen. Factors include its location as a business hub, convenient access to international and domestic transportation, first-class infrastructure, and the indigenous seaport.
There are five ways to form a Singapore company. Entrepreneurs have options such as Sole Proprietorship, Limited Liability Partnership, Partnership, Limited Partnership and a new Company.
Sole Proprietorship. It is regarded as the simplest form of business structure since this kind of business set up has one owner who has full control and authority in matters such as managing the business and its essential components such as profit, losses, assets and liabilities.
It is not given recognition as a legal entity. (Thus, a Sole Proprietorship enterprise cannot engage in any lawsuit whether as the plaintiff or respondent. In this regard, it cannot participate in any lawsuit affairs such as being the defendant or the plaintiff.} Aside from that, since the sole proprietor maintain complete ownership, it cannot gain properties and other assets
The profits gained during business operations are subject to personal income tax since the profit gained are regarded as personal income of the proprietor. Nonetheless, on the bright side, it exempts the owner from filing tax returns with ACRA and from conducting audits.
Partnership. It is owned by more than one proprietor or a company. The allowable number of proprietor in a partnership is 2 and the maximum allowable proprietor is 20.Each of the partner should have a declared authority that enables him/her to do activities in lieu of his or her partners.
As the Sole Proprietorship, the Partnership is also not considered as the legal entity. So, it is also not entitled to privileges and advantages enjoyed by a set up that is considered a legal entity. However, being equal in authority, all partners may be responsible for any loss and other unfavorable circumstances incurred by the co-owner or partner.
In matters of profits, Sole Proprietorship is similar to Partnership since in the latter, income forms a part of the personal income of each partner which result to having their respective income subjected to personal tax.
Limited Liability Partnership. In matters of personal assets, the partners constituting the Limited Liability Partnership are kept from being affected against personal liability for some partnership liabilities. However, they are not free from any financial losses and liabilities which emerge out of their unsound judgment. Considered as a legal entity, the LLP can directly sue or be sued and its business name can procure assets and properties and retain their ownership.
Two partners are required to create a Limited Liability Partnership in Singapore. However, there is no limit as to the number of maintaining partners with LLP.
When it comes to tax, each partner is taxed according to his or her share of income incurred by the LLP, if the partner is an individual. However, should the partner is another company; its income acquired from LLP is taxed at a corporate level.
Limited Partnership. The requirement in forming Limited Partnership in Singapore is having at least two partners. Two partners should comprise as the one playing the role of a General Partner and the other one acting as the Limited Partner. The General Partner manages the LP and features unlimited personal liability, including debts and obligations of the LP.
On the other hand, the Limited Partner is accountable within the range of his or her investments, yet, he or she enjoys the right to the cash flow of the LP.
The existence of the LP is when a new Limited Partnership enterprise in Singapore is being registered. An existing business enterprise or Limited Liability Partnership cannot be converted into a Limited Partnership. It cannot also be eligible to a legal status.
When it comes to taxation, the rules applied to a Limited Liability Partnership hold true in Limited Partnership.
Company. Based on Chapter 50 of Companies Act of Singapore, a company is a business firm registered as Private Limited by shares.
The Company is acknowledged as a legal entity with its owner called Shareholders. A Resident Director is one of the shareholders. The latter must possess characteristics such as being the head of the company in Singapore, being above 21 years old from the time of his appointment and uphold a Singaporean citizenship or Permanent Residence.
The rules that need to be taken into consideration regardless of the nature of the business are as follows;
* Basing on the nature of the business like sole proprietorship, limited partnership, etc., there is no restriction as to who can register at the Company Registrar in Singapore.
* All the four types of business except the Company must choose at least one local manager provided all proprietors or partners do not have the common residence in Singapore like the Singaporean Permanent Residence and the Singaporean citizenship.
(For foreigners to be appointed as the local manager or sole proprietor, an issuance of Entrepass, Employment Pass, and Dependent Pass is required. The issuance of Employment Pass, Entrepass, and Dependent Pass is a requirement for foreigners to be deemed as the local manager or the sole proprietor.}
The commencement of the Registration of the business process occurs when businessmen already decided as to the type of business enterprise he or she will get involved with in Singapore.
