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The five major types of corporate structures in Singapore are Business [Sole Proprietorships (one owner) or Partnerships (two or more owners)], Limited Partnerships, Limited Liability Partnerships, Companies and Branch office, Representative Office, Subsidiary of Foreign Company. Different business structures are recommended depending on the type of business activities to be carried out by the business. This article the types of corporate structures available in Singapore and their unique features.
Following are the 5 types of corporate structures in Singapore:
Following are the key features of different types of corporate structures in Singapore:
The simplest form of a legal structure in Singapore is Business. This Business can be either a sole proprietorship with single-person ownership or a partnership where ownership ranges from 2-20 persons.
The registration fee for the abovementioned business is 115$ (for one-year registration) and 175$ for three-year registration.
A Limited Partnership comprises two or more persons where one of the partners is a general partner, and the other partner is a limited partner. Unlike general partnerships, there is no cap on the maximum number of partners in a limited partnership.
A Limited partnership is not a separate legal entity. Here, only the general partners of the LP have unlimited liability towards the losses and debts of the LP. In contrast, the limited partners’ liability is limited to the extent of their contributions to the LP.
Limited Partnership is the most suitable form of corporate structure for professional services providers such as accountant firms, lawyers etc., where one of the partners bears unlimited liability.
The registration of an LP requires obtaining a name for LP, payment of the prescribed registration fees, having one general partner and other requirements involved in registration of an LP with the Accounting and Regulatory Authority (ACRA).
A Limited Liability Partnership in Singapore offers the partners the flexibility of a partnership and the separate legal identity of a private limited company. This means that an LLP has a separate identity distinct from its members. Thus, it has a perpetual succession.
Every LLP must have at least two partners, such as an individual, company, partnership or another LLP. Every LLP is required to appoint a manager who should be a natural person, locally resident in Singapore.
The separate legal identity of an LLP does not make the partners personally liable for any losses or debts incurred in the name of the LLP. Registration of an LLP involves obtaining a name for the LLP, submitting the registration fees and fulfilling the other prescribed requirements with ACRA.
Another major corporate structure in Singapore is a company which is a separate legal entity distinct from its owners and has its own identity in the eyes of the law.
Company registration in Singapore are further divided into private limited companies and public limited companies. A private limited company is limited by shares privately owned by the company’s members, and the maximum number of shareholders in a private limited company cannot exceed 50. On the other hand, a public limited company in Singapore, though limited by shares, is open for public ownership of the company, and the maximum number of shareholders can exceed 50.
Apart from these two companies, there are other types of companies such as Unlimited companies, private exempt companies etc.
Corporate structures in Singapore also exist in the form of a subsidiary of a foreign company, a representative office and a branch office.
A branch office is an extension of a foreign registered parent company in Singapore which is directly managed by the Directors of the foreign parent company.
A Representative office is mainly set up for the purposes of market research, conducting feasibility studies, marketing and liaisoning work for the parent company.
A subsidiary is a separate legal entity from its parent company and has its management to drive its activities.
The above mentioned number of corporate structures can look overwhelming prima facie. However, these structures are easy to be registered. The applicants should always focus on the kind of business activities and objectives they wish to achieve from a corporate structure. To find clarity about which kind of business structure would be beneficial for you, get on a call with Singapore incorporation experts at Enterslice.
Read our Article:How to set up a company in Singapore?