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Q. What is a Company?
A. A company is an incorporated entity and once registered under the Companies Act, Chapter 50, it has legal personality. It is different from a business firm and usually has the words 'Pte Ltd' (Private Limited) or 'Ltd' (Limited) as part of its name.
A private limited company has its own legal identity, separate from its shareholders (who own the company) and its directors (who manage the company). Companies pay corporation tax on their profits; Shareholders received dividends which are tax free under the Singapore new one tier tax system.
One of the major advantages of a limited company is that the shareholders are not liable for the company's debts beyond the amount of share capital they have subscribed, provided there has been no deceit, fraud or malpractice.
What are the different types of Companies
Private Limited/ Pte Ltd Companies
This is a locally incorporated company where the number of shareholders is limited to 50.
Exempt Private Company
An exempt private company is a private limited company, of which all shares are not held directly or indirectly by any corporation (i.e. another limited company), and which has not more than 20 members.
Public Companies
Number of shareholders can be more than 50 members and the company may raise capital by offering shares and debentures to the public. A public company must register a prospectus with the Registrar before making any public offer of shares and debentures.
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Q. What is the organizational structure of a Private Limited Company?
A. The organizational structure of a Private Limited relies on three basic groups: shareholders, directors and officers.
A Private Limited Company is owned by shareholders; however, they do not directly manage the Company. Instead, they influence corporate decisions through indirect methods such as electing and removing directors, approving or disapproving amendments to the articles of association and voting on major corporate issues.
The boards of directors are responsible for managing the affairs of the Company. Usually, directors make only the major business decisions and supervise and appoint the officers who make the day-to-day business decisions of the Company.
Officers are responsible for the everyday management of the Company. Typically, officers are appointed directly by the board of directors.
It is important to note that a shareholder may serve on the board of directors and as an officer.
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Q. What is the procedure for incorporation of a local Private Limited Company?
A.
- Minimum 1 shareholder + 1 director + 1 company secretary
- Shareholders may be corporations or individuals and can owned 100% of it's companies shares
- At least one of director must be ordinarily resident in Singapore. i.e. Singaporean/ Singapore Permanent Residence (PR)/ Singapore Employment Pass Holder (We can act as your company's local nominee director, if required for a fee)
- The same shareholder can also act as director
- The company secretary has to be Singapore ordinarily resident
- Sole shareholder and director cannot act as Company Secretary
- Minimum initial paid-up share capital is S$ 1.00
- Singapore Private Limited Company must have a local Registered address in Singapore
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Q. Do you need to get approval for regulated business activities?
A. ACRA controls the registration of business firms and incorporation of companies. However, the nature of the actual business activity could be subjected to control and regulation by other Government authorities. Even if your business firm
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Q. Are there restrictions on names?
A. A company name must be approved before the company can be registered. A proposed company name will not be approved if it is identical to the name of another company. Undesirable names, including offensive or vulgar names will also not be approved. A name will not to be registered if it is the same as an existing company, unless there is some clear distinction (e.g. by trade) with that of an existing company.
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Q. Is a registered office required?
A. Yes, a Singapore company must have a local registered office in Singapore.
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Q. What documents must be maintained at the registered office?
A. Certificate of Incorporation, Statutory Books, Register of Members, Accounting Records (however, directors can decide to keep them in a different place).
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Q. Are documents available for public inspection?
A. Generally documents are open to public inspection, such as accounts, debentures, names of directors, share capital, particulars of any legal charges. However, some documents are only available for inspection to shareholders.
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Q. What is Memorandum and Articles of Association?
A.Memorandum and Articles of Association must be lodged with ACRA during incorporation of the company.
The information reflected on the Memorandum is:
- name of the company
- location of the Registered Office
- liability of the members
- company's capital structure,
- names of the subscribers and the number of shares subscribed by them
- Principle activities of the company (optional)
The Articles stipulate the rules governing the internal management of the company.
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Q. What is the minimum number of shareholders?
A. There must be at least 1 shareholder who can either be an individual or a corporation. Details of the shareholders must be filed and appear on the public file, but anonymity can be preserved by the use of nominee shareholders.
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Q. Where can the company be administered?
A. Anywhere in the world.
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Q. Are Registered or bearer shares allowed?
A. Limited companies can only have registered shares.
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Q. How many subscribers/ incorporators are allowed?
A. Minimum one, the subscription can be a corporate or individual.
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Q. What is the location for general meetings of shareholders and members?
A. Anywhere, the first meeting must be held within 18 months after incorporation.
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Q. Can proxies be appointed?
A. Yes, to act as representative at Annual General Meetings and/or Extraordinary General Meetings.
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Q. What is the permitted currency of share capital?
A. Any.
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Q. What is the maximum authorized share capital for minimum duty?
A. Not applicable. The concept of authorized capital has been abolished.
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Q. What is the par value of each share?
A. Not applicable. The concept of par value has been abolished.
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Q. What is the minimum issued/paid up capital?
A. The minimum authorized share capital is S$ 1.00.
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What is the minimum and maximum number of directors allowed?
A. A minimum of one director is required and you can have unlimited numbers of directors in a company
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Q. Any residential, nationality requirements or professional qualifications for directors?
A. Singapore private limited company must have one director who must be "ordinarily resident in Singapore" i.e. a Singapore Citizen, a Singapore Permanent Resident or a person who has been issued an Employment Pass/Approval-In-Principle letter/Dependant's pass. Details of the directors appear on the public file, but anonymity can be preserved by the use of nominee directors. The director and the company secretary cannot be the same person.
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Q. Are corporate directors permitted?
A. No. Corporate directors are not permitted
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Q. Where has the board meeting of directors have to be held?
A. Board meeting can be held anywhere.
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Q. What is the role of a company secretary?
A. Companies are required to appoint a local resident company secretary, who must be a natural person. (For roles & responsibilities of a company Secretary, click here)
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