They
say, it is easy to incorporate a business in Singapore. However, 'they' fail to
tell you the complexities and twists involved in setting up a business a
Singapore. To incorporate a company in Ahmedabad, the first hurdle you will
come across is selecting an appropriate business structure. To a great extent,
outsourcing the process of Singapore company registration to an external firm
is the widely accepted option. However, it becomes necessary to understand the
different business structures in Singapore before you employ any firm offering
Singapore company registration services.
The
Various Business Structures to Incorporate a Business in Ahmedabad
Usually,
foreigners do not require any type of government approval to set-up a new
business in Singapore. Singapore allows about 100% foreign ownership, which
makes it the best and preferred location for foreign entrepreneurs, to do
business.
For
incorporating a bank or a financial institution, getting an approval from the
Monetary Authority of Singapore is a must. Let us check out the different
options for business structures entrepreneurs have, for incorporating a company
in Singapore.
Representative
Office: A foreign company willing to have its presence in Singapore, but
does not intend to carry out any business activities herein, should incorporate
their company as a representative office. Singapore corporate environment
considers a representative office as an administrative arrangement, primarily,
designed for the non-commercial activities. Therefore, a registered office will
not have any kind of separate legal status from its parent company. Please
note, Singapore does not allow a registered office to perform any business
activities with the motive of generating revenue and earning profits.
Branch: Foreign
companies not interested to incorporate a separate company in Singapore with a
different name, should prefer to incorporate a branch office. After
incorporating a branch office, it is possible to carry out business activities
under the name of or under the corporate brand of the foreign corporation. A
branch office incorporated in Singapore is legally considered as an extension
of its parent company. Please note, in no way, a branch office will be
considered as a subsidiary company owned by a foreign parent company. The
Singapore Companies Act does not prescribe any special or separate Memorandum
of Article of Association (MAA) for the branch offices. A branch office is free
to run its shareholder structure and business activities as directed by the
original MAA of the foreign company.
Subsidiary: A
private limited company having foreign company as its major shareholder should
incorporate its business as a subsidiary company. A subsidiary company is a
resident company of Singapore and is regulated by Singapore laws. A subsidiary
company has a legal status in Singapore, therefore, is treated as a different
company from its foreign counterpart. In this option, the liability of the
foreign company is limited to the share capital it has invested. Besides, the
foreign company is terminated from the obligations of debts and liabilities of
the subsidiary company. Please note, more often a subsidiary company is
registered as a limited liability company in Singapore.
Incorporated
Companies: Singapore offers two major options for incorporated companies;
Private limited companies and Public companies. A Private limited company is
allowed to have as many as fifty shareholders and also bears restrictions on
share transfer. On the contrary, a public limited company does not have such a
restriction and can have as many shareholders as they want. In addition, the
public limited company is allowed to raise capital by offering shares and
debentures to the public. Incorporated companies can be registered with a minimal
capital of S$1 proceeded by at least one shareholder, one director, as well as
one company secretary. It is all right if the chosen shareholder is either an
individual or a corporation. Either of the shareholders is not required to be a
permanent Singapore resident. Please note, the liability of shareholders is
limited to the amount, if any, unpaid on the shares is issued to them. Apart
from that, S$1 is the fixed par value of shares for each share and no-par-value
and bearer shares are not permitted.
Limited
Liability Partnership: When two or more partners want to incorporate a
company in Singapore, then registering a business as a Limited Liability
Partnership (LLP) company is the best option. Under this partnership entity,
ACRA identifies both partners as different personalities who can sue or be
sued. Additionally, both the partners are allowed to own property in their
individual names. In an LLP company, partners are offered an option to function
either independently or as a combined entity. Please note, although the minimum
number of partners required to form an LLP is two, there are no limitations on
the number of partners an LLP can have.
Limited
Partnership: Limited Partnership seems to be a flexible business structure
for entrepreneurs not interested to take any kind of responsibility for
business management functions. Such entrepreneurs usually hand over their
management of company to an entirely different entity. The chosen entity can be
either an individual or a corporation, enjoying unlimited liability. There are
more than one, general and more than one, limited partners, in a Limited
Partnership company. Please note, if general partners choose to participate in
the business function they become liable, and their personal assets are
pledged. On the contrary, limited partners are liable only for the amount they
have contributed.
Sole
Proprietorship: Sole proprietorship is the simplest and easiest business
structure to incorporate a company in Singapore. Foreign and local
entrepreneurs widely prefer sole proprietorship as their chosen business
structure. More often, investors with less capital and big dreams and investors
interested to incorporate small businesses register their company as a sole
proprietorship firm. The statutory requirements state that, the sole
proprietorship companies will have to register all their profiteering
activities carried on the daily basis. Please note, sole proprietorship is not
considered as a separate legal entity. The owner and his business both are
considered as one and the same.
