Formation of Company: Different Types of Companies to Start In Singapore
If you are a local or foreign investor considering Formation of company, then Singapore is a perfect place to consider due to its hassle-free system and low tax rates. Apart from the ease of starting a business, Singapore is also the fourth leading center with an extraordinary GDP. Singapore is considered as one of the most highly globalized economies with a very stable political environment.
Locals, as well as foreign individuals that are considering the incorporation of a company in Singapore, should be well versed with types of companies that they can consider creating. Both local and foreign investors can consider opening any of the following types of companies in Singapore;
Sole proprietorship: This is a one-person business with no separate legal entity. In this type of company, the owner is entitled to all of the profits and losses that may occur in the business. The owner is also liable for any of the debts that might be incurred by the business.
Partnerships: This type of business can have about 2 – 20 people. The partners are expected to share profits and losses incurred by the company as per the terms laid in the partnership deed. Both sole proprietorship and partnerships are not corporate entities, so they are exempted from filing annual returns.
Limited Partnership: This type of company comprises of one limited partner and one general partner. The general partner is considered to be accountable for the unlimited liabilities or the debts incurred by the company during his term as the general partner. Limited partners are considered liable only to a set limit, as stipulated in the partnership agreement.
Limited Liability Partnerships: LLPs are a type of company where the liability of an individual partner is limited to the amount of capital that they have injected into the company. The partners are therefore not liable individually for the debts incurred by other partners. A partner is considered to be liable for the losses that are incurred due to their level of negligence or oversight. However, it’s important to note that the law provides protection to those in limited liability partnerships since partners and the companies are considered to be separate entities.
Local Companies: In this case, the company and its owners are treated as separate entities. When forming a local company, one of the directors should be a citizen of Singapore or a permanent resident of Singapore. The company should, therefore, be incorporated under the Companies Act and can either be limited or unlimited either by guarantee or by shares.
In the case of a limited shares company, the individuals or corporate doesn’t have to reside in Singapore. For foreigners considering the formation of company in Singapore, it’s important to be aware of key things that make Singapore a global business hub. The high level of infrastructural development alongside government policies that promote business formation and growth are some of the key factors that award Singapore that enviable status. The process of incorporation of a company in Singapore can be carried out online as long as you engage a professional CA firm in Singapore.
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