Overview of Private Limited Company Formation in Singapore
The World Bank’s Ease of Doing Business Index ranks Singapore second, which highlights the fact that Singapore is the most preferred destination for business setup. If we look into the different types of business models, then one might encounter Private Limited Company as the most preferred business model among local and foreign businesses. This is because this business model offers maximum flexibility when compared to other business models. We will guide you through the online process in a few simple steps. First, we will verify the availability of your desired company name. After that, we will help in your private limited company formation in Singapore, open a bank account, and ensure compliance for the upcoming year. A private limited company is a type of legal entity separate from its shareholders and limited by shares. Being a limited entity means that the shareholders of a private limited company cannot be held liable for any of the debts and losses incurred by the company beyond the prescribed share capital of the owners of a private limited company. A Private Limited Company Formation in Singapore can have up to 50 individual or corporate shareholders. The Companies Act of 1967 of Singapore governs the formation of a private limited company. The suffix “Private Limited", "Pte Ltd", or "Ltd" is usually attached in the case of a Private Limited Company Formation in Singapore. Now, let us navigate through the intricacies of a Private Limited Company Formation in Singapore and guide you step by step to successfully setup your dream company in Singapore.
Advantages of Private Limited Company Formation in Singapore
Private Limited Company Formation in Singapore is easy. Moreover, it requires only one member and as little as $1 in paid-up capital.
Limited Liability of Shareholders
This means that the shareholders are not liable for the company's debts and losses.
It means the private limited company will exist until such time if it is not wound up. And that any change in the partners would not affect the functioning of the company in any manner whatsoever.
What is a Private Limited Company Formation in Singapore?
Limited in Private Limited Company in Singapore
The word Limited means the limitation of the shareholder’s liability towards the company. If the shareholder has paid up his portion of capital, he will be freed of any liabilities or obligations towards the company.
Tax Liability of a Private Limited Company
For the first 3 years, the newly formed companies shall be charged 0% for up to $100,000 taxable profit. For the next $200,000 profit, the company shall be charged at the rate of 8.5% of profit. Further, for taxable income above $300K, the company shall be charged at the rate of 17% of profit.
You can raise funds for your proposed private limited company in many ways. These may include equity financing, debt financing, crowdfunding, angel investors, and through banks.
Rules pertaining to governance
This includes the procedure regarding Annual General Meetings, Extraordinary General Meetings, and appointment and resignation of directors.
Our Services in Private Limited Company Formation in Singapore
Our team at Enterslice is a one-stop solution for all the problems that you may encounter on your journey to a Private Limited Company Formation in Singapore. We can help you by providing you with the following services
Business Model Evaluation
Our team of experts at Enterslice will first evaluate your business needs, values, and future vision, based on which we provide you with the most apt service package and a personalized business model for your business venture.
Service Package Selection
After the successful generation of the service package for you, you will be directed to pay the required fee as per the service package. You can pay the fee using any of the following modes
- Bank Transfer- NEFT or IMPS
- M Swipe (Credit or Debit Card)
- Google Pay
Before your private limited company formation in Singapore, our team will ensure that it falls within the eligibility list as prescribed by the Accounting and Corporate Regulatory Authority (ACRA).
Our team will suggest a business name for your proposed company and get the name of the private limited company setup.
We shall help you setup your private limited company in Singapore hassle-free on the BizFile+ portal in line with ACRA’s regulations.
Our proficient team of experts shall provide you with expert advice and consultation in forming a constitution for the company.
Our robust panel of Legal experts at Enterslice will help you keep up with the latest laws and regulations.
License and Permits
Our team will ensure that your proposed private limited company in Singapore acquires all the licenses and permits needed for business.
We shall help you by preparing all the paperwork related to Paper works and maintaining the checklist.
We shall provide you with consultation concerning maintaining Company Setups.
Bookkeeping and Accounting
Our expert panel of Accountants will guide you in filing the tax returns of your proposed private limited company.
Setting up of bank account
After the registration process is completed on the BizFile+ portal, our team will help you set up a bank account in Singapore under your proposed company's name.
Legal Consultation and advisory services tailored to your company’s business needs throughout the process.
necessary papers Required in Private Limited Company Formation in Singapore
Since a Private Limited Company Formation in Singapore is easy but cumbersome, our team of Legal Experts has meticulously prepared an exhaustive checklist for registering your company and shall help you with all the Paper works processes to create a hassle-free registration experience for you. We at Enterslice shall keep you updated with all the necessary paper requirements.
To successfully setup a company in Singapore, there must be a minimum of two persons who wish to form a company, a Submission of AoA (Articles of Association) to the Registrar of Societies, at least one share certificate issued to each shareholder, at least one shareholder who can be a resident or foreigner, a resident director who must be a permanent resident or a foreigner with a valid employment pass, a qualified company secretary who is a resident of Singapore, a local setup business address in Singapore, at least $1 in paid-up capital, Employment Pass in case of foreigner director, Annual filing with the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS) and 1-50 proposed shareholders.
The following necessary papers must be present with you during the Private Limited Company formation in Singapore- A Unique business name, Personal Particulars of the Director, Personal Particulars of the CEO ( if any), Personal Particulars of the Company Secretary, Personal Particulars of each shareholder, Company’s constitution, Shareholder’s agreement specifying the shareholding pattern, the company’s setup office address, Company’s setup alternate address ( if any) and the Description of business activities of the proposed company using Singapore Standard Industrial Classification Code (SSIC) 2020.
Constitution of the Private Limited Company in Singapore
The Constitution is a necessary paper that outlines the rules regarding the governance of the proposed company. Your company’s constitution must contain the information mentioned in the subsequent paragraphs.
It must mention the Rights of the key personnel like directors, shareholders, and company secretary, the Company’s Name, the Company’s setup office address, the Liabilities of company members, and the Specifics of shares issued.
It is important to mention that while submitting your application form for company registration on the BizFile+ portal, you should also attach a copy of the company’s constitution along with it. If in case, you do not want to create your own constitution, you can adopt a model constitution under Companies (Model Constitutions) Regulations 2015.
Checklist: Private Limited Company Formation in Singapore
Choosing the name for the company
The first step in the private limited company formation in Singapore is choosing an appropriate name for the company. The desired name is submitted to the ACRA's online portal, BizFile. The availability of the chosen name is checked at this portal, and only then can the name be reserved for the company. The applicant is also required to select and specify the SSIC Code (Singapore Standard Industrial Classification Code) depending on the type of commercial activities sought to be undertaken by the applicant.
After obtaining the approval for the desired name, the applicant can proceed further to setup the company. The company should be setup within 120 days from the date of reserving the name for the company; otherwise, the name shall not remain reserved after that.
Deciding the type and structure of the company
The applicant has to decide which of the following entities would be most suitable according to the needs and requirements of the activities he wishes to undertake through a company
- Exempt Private Company Limited by Shares: In this type of private company, the maximum number of shareholders is 20 in number. It can also be a company gazetted by the minister as an exempt private company. It is important to note that the corporation cannot be a shareholder in such a company. This type of company can prepare its financial statements in its format provided they comply with Singapore Financial Reporting Standards. These companies need to add the suffix Pte Ltd. to their names.
- Private Company Limited by Shares: In this type of private company, the minimum number of shareholders is 20 while the maximum number of shareholders is 50. A corporation can be a shareholder in such a company. This type of company has to prepare its financial statements in XBRL format.
Deciding the Financial year-end (FYE) for the company
Choosing the financial year end helps to ensure the systematic filing of taxes every year. AGM of your company must be held within 6 months of choosing the financial year-end. Also, you have to file your company’s annual returns within 7 months after choosing your financial year-end.
You will get the soft copies of the following necessary papers
- Company Business Profile: It is an electronic report containing all the important business information. The ACRA issues it to the newly setup companies. On payment of the fee, you can obtain a hard copy as well.
- Certificate of Incorporation: It is a necessary paper that confirms the successful private limited company formation in Singapore. The Singapore Company Registrar issues it. It includes the companys UEN. On payment of the fee, you can obtain a hard copy as well.
- Shares Certificate: This necessary paper shows the allotment of shares to each shareholder and acts as proof of their ownership. The company secretary issues it.
Private Limited Company Formation in Singapore: Company Setups
Under the Companies Act of 1967 of Singapore, all companies are required to maintain up-to-date setups of the key personnel, namely all the Shareholders, Directors, Secretaries, Auditors, CEOs, and Controllers, also known as beneficial owners.
These setups are maintained by ACRA in electronic form and accessible to the public. In case of any changes in the appointments or particulars of directors, secretaries, auditors, and CEOs, you must update this information via BizFile+ within 14 days from the date of the change. The setups that have to be maintained by ACRA include- the Setup of Registrable Controllers, Central Setup of Registrable Controllers, Electronic Setup of Members, Electronic Setup of Directors, Electronic Setup of Secretaries, and Electronic Setup of CEO.
Private Limited Company Formation in Singapore: Registration
A Private Limited Company Formation in Singapore is setup with the Accounting and Corporate Regulatory Authority (ACRA) of Singapore. All the applications for the registration of a new company have to be submitted online via ACRA's electronic filing and information retrieval system, BizFile+. You have to log in to the BizFile+ portal.
You have to engage a setup filing agent to apply on behalf of the proposed director. Under the eServices menu, click "Local Company" followed by “Start a New Local Company” and then attach the requisite necessary papers, including the company constitution, address, etc.
The total cost of registering a private limited company is around $315, which includes a $300 registration fee and a $15 name application fee. Various payment options are available for you, namely Credit card/debit card, Apple Pay, Google Pay, and PayPal.
Private Limited Company Formation in Singapore: Post-Registration Compliances
Unlike other business entities like sole proprietorship or LLP, there is an exhaustive list of compliances to be undertaken by a private limited company. Our robust panel of qualified Secretaries can help you adhere to these compliances. All the setup companies have to mention their company name and unique entity number (UEN) in business letters, statements of account, invoices, official notices, and other correspondences. After successfully incorporating your business, you can apply for permits and licenses through the Singapore Go Business Licensing portal.
The First Board Resolution for confirming the company's directors must be held within one month from the company's date of incorporation. An Annual General Meeting (AGM) must be held with company’s all the shareholders to discuss the agenda. For opening up of bank account in Singapore in the name of the company, you need a board resolution whereby all the directors shall consent to the same. It is mandatory to appoint a Company auditor within 3 months of the company's incorporation date. Also, a Company Secretary must be appointed within 6 months of the company's incorporation date.
The Company Registrar will create a Company Business profile for the successful registration of the company. You must setup for the Singapore Central Provident Fund (CPF) pension scheme. You must apply for the GST scheme in case your company's annual taxable income exceeds $1 million. Make sure to file the company's annual returns within 30 days from the date of the AGM and file the company’s corporate tax every year by November 30th, according to the Singapore Income Tax Act.
Private Limited Company Formation in Singapore: Refusal of Registration
Non-Approval of Name
When a company name is not approved under the Business Name Registration Act on account of a similar name with an already functioning company or an offensive name, then that application for registration of a company is rejected by ACRA.
Discrepancy in no. of Shareholders
At least one shareholder is required to start a company in Singapore. Due to the failure to have the requisite number of shareholders to start a company, the application for registration is likely to be rejected.
Violation of the Singapore Companies Act
If your setup company address is not in Singapore as per Section 142(1) of the Companies Act, then your application for registration is liable to be rejected by the ACRA of Singapore.
Private Limited Company Formation in Singapore: Post Registration of the Company
Getting an Email
BizFile+ will send an email to the appointed officers (e.g. directors, shareholders, and company secretary) for their endorsement. All appointed officers have to endorse their appointments in the BizFile+ portal within 60 days from the date of the email.
Unique Entity Number (UEN)
BizFile+ will automatically generate your company's UEN after the company's successful registration. This UEN has to be kept confidential and will be used for the company's future transactions with the government.
Company Business Profile
The Company Business Profile is a comprehensive electronic necessary paper with essential business information. The ACRA provides it to newly established companies.
The first board meeting is held to appoint directors in the newly setup company. It is mandatory to conduct this Annual General Meeting.
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Structure of a Private Limited Company in Singapore
The person so appointed must be at least 18 years old, a resident, or a permanent resident of Singapore. The role of the director is to oversee the company's affairs and prepare financial statements for the company according to the Singapore Companies Act of 1967.
The person appointed must be a resident of Singapore. The person concerned is responsible for overseeing the administration of the company, which includes preparing minutes of meetings of directors and shareholders, conducting Annual General Meetings, etc. This position cannot be left unoccupied for more than 6 months.
Chief Executive Officer (CEO)
It is an optional post; however, if you appoint a CEO for your company, then it is mandatory to disclose their particulars in line with ACRA guidelines.
It is an optional post; however, if you appoint an MD for your company, then it is not mandatory to disclose their particulars in line with ACRA guidelines.
Private Limited Company in Singapore: Bank Account Opening of Company
After the successful private limited company formation in Singapore on the BizFile+ portal, you can proceed to open up a bank account in Singapore in the name of the company. Opening a corporate bank account in Singapore is an easy task with the assistance of Enterslice. We have prepared a list of necessary papers required by you to open up a bank account in Singapore
- Resolution by the company’s board of directors mandating their consent for the same
- Copy of the Certificate of Incorporation of the company
- Copy of the business profile of the company
- National ID card of Singapore or copy of passport
- Proof of residential addresses of the directors
Challenges: Private Limited Company Formation in Singapore
There are some hindrances that you may encounter during your Private Limited Company Formation in Singapore, which include choosing the right form of business structure for your company, choosing an appropriate business name, Regulatory compliances as per ACRA guidelines, Tax Regulations Compliance, Post Registration Compliances, Maintaining necessary papers/checklist, Forming the constitution of the proposed company, Opening up of bank account in the name of the company and Getting appropriate licenses and permits. Our Foreign Business Incorporation desk at Enterslice shall help you resolve these challenges and create a hassle-free registration experience for you.
Private Limited Company Formation in Singapore: Particulars of Registration
NRIC and full name
The full name of the company director, company secretary, auditor, and other key personnel involved must be attached to the application of registration. Any change concerning the appointment of key personnel must be duly communicated to the ACRA.
Contact information and Nationality
The key personnel's contact details, namely telephone number and email address, must be specified. The nationality of the company director, company secretary, auditor, and other key personnel involved should also be mentioned.
The residential address or proof of the key personnel's address must be specified. Any change in these particulars must be duly communicated to the ACRA.
Private Limited Company Formation in Singapore: Tax Exemptions
Profits and dividends are tax-free in the hands of shareholders. It is pertinent to note that Singapore's corporate income tax slab is on the lower end when compared with other countries. It falls in between 0% to 17%. Further, newly setup companies in Singapore, whether domestic or foreign, are given tax incentives and exemptions.
Tax Exemptions in the form of Capital gain Tax Exemption, Income Tax exemption on profits earned by the company, and Employee Provident Fund Exemption on the part of the employer can be claimed by a Private Limited Company Formation in Singapore. You can take exemptions under some government schemes as well. For instance, the Enterprise Development Grant.
Winding up of a Private Limited Company in Singapore
Winding up refers to the process whereby the company is dissolved, and its assets are sold off to pay off its debt. This happens when a company is unable to pay off its debts, and it is justifiable in the larger interests of society to wound up the company. The company can be wound up in the following manner using given methods.
In Compulsory winding up, the company is wound up on the order of a High Court as per the provisions of Section 125 of the Insolvency, Restructuring and Dissolution Act (IRDA). In Voluntary Winding up, a resolution by the company’s shareholders is passed with an immediate effect.
Private Limited Company Formation in Singapore by a Foreigner
If a foreigner wants to setup a company in Singapore, then he/she must engage a setup filing agent who would submit the online application at BizFile+ on his behalf. If your company wants to employ foreign workers, you must issue an employment pass. Information pertaining to the employment pass shall be available on the Ministry of the Manpower (MOM) website.
Why choose Enterslice for your Private Limited Company Formation in Singapore?
- Successful incorporation of 500+ Private Limited Companies in Singapore
- Our team at Enterslice consolidates the whole registration process for you, thereby making it easier for you to comply with the legal obligations.
- Setup your dream company by sitting in any corner of the world.
- Chat with our AI bot at your convenience to get the answers to your queries.
- Continuous support by the team of 1000+ qualified secretaries for AGM preparation
- Annual bookkeeping services through our network of 40,000+ Auditing firms globally
- End-to-end assistance throughout the registration process by a robust panel of our experts of 50,000+ Lawyers/Attorneys/CAs/CPAs