Business Start Up
Business Start-up Services
A) Singapore – Company incorporation
Sole Proprietorship& Partnership
What is a Sole-Proprietorship?
A sole-proprietorship is a business owned by one person or one company. There are no partners. The sole-proprietor has absolute say in the running of the business.
What is a partnership?
A partnership is a business firm formed by two to twenty partners. Once there are more than twenty partners, the partnership must be registered as a company under the Companies Act, Cap. 50
Requirements for Registration
Business Name Business owners may choose any name of sole-proprietorship as long as the proposed name is not:
- Undesirable (vulgar, offensive, obscene, prohibited)
- Identical to the name of a business entity on the register
- Reserved under the Business Names Registration Act, the Companies Act, the Limited Liability Partnerships Act or Limited Partnerships Act
- Restricted i.e. a name which the Minister has directed the Registrar not to accept for registration e.g. Temasek
principal place of the business and any other place where the business is carried out. However, a P.O Box address is not allowable for business address.
Using a home address as business address
Under the Home Office Scheme, homeowners are allowed to conduct small-scale businesses using their residential premises. This scheme applies to both HDB and private properties.
Application for approval under the Home Office Scheme can be submitted before or after business/company registration with ACRA.
Local authorised representative
The Business Names Registration Act 2014 states that where an individual proprietor or all the partners of a firm do not reside in Singapore, the individual proprietor or firm must appoint at least one authorised representative.
Who can be appointed as the local authorised representative?
Authorised representative must be a) a natural person; b) at least 18 years of age; c) otherwise of full legal capacity; and d) ordinarily resident in Singapore.
Owner and Partners
Singaporean Citizens and Permanent Residents
From 1 January 1994, all self-employed persons are required to top up their Medisave account with CPF Board before they register a sole-proprietorship or partnership, become the new partner of an existing sole- proprietorship or partnership, or renew their business registration. This requirement is only applicable to Singaporean Citizens and Permanent Residents.
A foreigner, who would like to register a Sole-Proprietorship in Singapore, is required to appoint a locally resident authorised representative whilst he continues to reside outside Singapore.
If a foreigner wishes to register a Partnership in Singapore whilst he continues to reside outside Singapore, there must be a least a locally resident partner in the business firm. If all the partners are foreigners, a locally resident authorised representative must be appointed.
Foreigners who wish to set up a business and be present in Singapore to manage its operations are strongly advised toseek approval from MOM before registration.
The business registration can be renewed before the expiry date.
• Private Company Limited by Shares
A private company has a maximum number of shareholders limited to 50.
• Exempt Private Company Limited by Shares
An Exempt Private Company (EPC) is a private company which has at most 20 shareholders and none of the shareholders is a corporation. It can also be a company the Minister has gazetted as an EPC (see section 4(1) of the Companies Act).
• Public Company Limited by Shares
A public company limited by shares can have more than 50 shareholders. The company may raise capital by offering shares and debentures to the public. A public company must register a prospectus with the Monetary Authority of Singapore before making any public offer of shares and debentures.
• Public Company Limited by Guarantee
A public company limited by guarantee is one which its members contribute or undertake to contribute a fixed sum to the liabilities of the company by way of guarantee. It is commonly formed for carrying out non-profit making activities, such as for promoting art, charity etc.
Requirements for Registration
A director is the person responsible for managing the affairs of the company and providing it with directions. A director must make decisions objectively, act in the best interest of the company, and be honest and diligent in carrying out his duties.
Under the Companies Act, A company must have at least one director who is ordinarily resident in Singapore.
‘Ordinarily resident in Singapore” means the director’s usual place of residence is in Singapore. A Singapore Citizen, Singapore Permanent Resident or an EntrePass holder can be accepted as a person who is ordinarily resident here.
Subject to compliance with prevailing laws and regulations on employment of foreign manpower, an Employment Pass holder may be accepted as a director who is ordinarily resident here. EP holders who wish to undertake a secondary directorship position in another company (apart from the company his EP is approved for), will have to apply for and be granted a Letter of Consent (LOC) before registering their directorship positions with ACRA.
Any person above the age of 18 years old can be a director of a company. There is no maximum age limit for a director. However, certain individuals (e.g. bankrupts and persons convicted of offences involving fraud or dishonesty) are disqualified from holding director positions.
Every company must appoint a secretary within 6 months from the date of its incorporation
The company secretary must be residing locally in Singapore and he/she must not be the sole director of the company.
The Secretary may also be held liable for the company’s failure to comply with the law in certain situations.
The secretary of a public company must comply with section 171(1AA) of the Companies Act i.e. must possess at least one of the following qualifications:
Been a secretary of a company for at least 3 of the 5 years immediately before his appointment as secretary of the public company.
- Qualified person under the Legal Profession Act (Cap. 161).
- Public accountant registered under the Accountants Act (Cap. 2).
- Member of the Institute of Certified Public Accountants of Singapore.
- Member of the Singapore Association of the Institute of Chartered Secretaries and Administrators.
- Member of the Association of International Accountants (Singapore Branch).
- Member of the Institute of Company Accountants, Singapore.
Chief Executive Officer (CEO)
“Chief Executive Officer”, in relation to a company, means any one or more persons, by whatever name described, who is in direct employment of, or acting for or by arrangement with, the company; and is principally responsible for the management and conduct of the business of the company, or part of the business of the company, as the case may be.
It is not compulsory for a company to appoint a CEO. It is the company’s discretion to decide whether to appoint a CEO. Such a person may be appointed as both a director as well as a CEO. The officers of the company will be the director, secretary and the CEO, if the CEO is employed in an executive capacity.
The role of the managing director may or may not be the same as the role of the CEO, and it will also depend on the designations used within a particular company. A managing director may be appointed separately from the appointment of a CEO.
A company shall appoint an auditor within 3 months from the date of its incorporation, unless it is exempted from audit requirements under Section 205B, or 205C, of the Companies Act.
Branch of Foreign Company
Requirements for Registration
Under the Companies Act, the minimum number of authorised representatives required is one.
The branch of a foreign company must have at least one authorised representative who is ordinarily resident in Singapore.
Being “ordinarily resident in Singapore” means the authorised representative’s usual place of residence is in Singapore. A Singapore Citizen, Singapore Permanent Resident or an EntrePass holder can be accepted as a person who is ordinarily resident here.
A Limited Partnership (LP) is a vehicle for doing business in Singapore. It is a partnership consisting of a minimum of two partners, with at least one general partner and one limited partner. A LP does not have a separate legal entity from the partners, i.e. it cannot sue or be sued or own property in its own name.
An individual or a corporation may be a general partner or a limited partner of the LP. Appointing a local manager is not mandatory unless all the general partners are residing outside Singapore.
A general partner is responsible for the actions of the LP and is liable for all debts and obligations of the LP. A limited partner is not liable for debts and obligations of the LP beyond his agreed contribution, provided he does not take part in the management of the LP.
If there is no limited partner registered with ACRA, the LP registration will be suspended and the general partner will be deemed registered under the Business Names Registration Act. Once a new limited partner registers with ACRA, the LP registration will be restored and the registration under the Business Names Registration Act will cease.
Partners in LP
Every LP must have at least (i) one general partner and (ii) one limited partner. There is no limit to the maximum number of partners. The general partner can be an individual or a company. The limited partner can be an individual, a company or an unregistered foreign company.
A general partner has unlimited liability and can take part in the management of an LP. This means a general partner is responsible for the actions of the LP and is liable for all debts and obligations the LP incurs.
A limited partner’s liability on the other hand is capped at the amount of his agreed investment in the LP. He is not liable for any debts and obligations of the LP beyond this amount.
A limited partner shall not take part in the management of the LP. If he does, he will be treated as a general partner with unlimited personal liability
Managers in LP
An LP must appoint a local manager (who is at least 18 years of age) if all the general partners are not “ordinarily resident” in Singapore.
The local manager is personally responsible for discharging all obligations of the LP. He is subject to the same responsibilities, liabilities and penalties as a general partner of the LP if the general partner defaults in respect of such obligation.
The manager of an LP must not be an undischarged bankrupt (unless he has obtained permission from the High Court or of the Official Assignee).
A foreigner, who wants to register an LP in Singapore, is required to appoint a locally resident manager. The foreigner can continue to reside outside Singapore.
Any person above the age of 18 years old can be a partner of a Limited Partnership.
A Limited Liability Partnership (LLP) is a vehicle for doing business in Singapore. An LLP gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company.
This means that the LLP is seen as a body corporate and has a legal personality separate from its partners. The LLP has perpetual succession, which means any change in the partners of an LLP will not affect its existence, rights or liabilities.
An LLP is capable of: 1) Suing and being sued in its name; 2) Acquiring and holding property in its name; 3) Having a common seal in its name and Doing such other acts and things in its name, as bodies corporate may lawfully do and suffer.
The partners of the LLP will not be held personally liable for any business debts incurred by the LLP. A partner may, however, be held personally liable for claims from losses resulting from his own wrongful act or omission, but will not be held personally liable for such wrongful acts or omissions of any other partner of the LLP.
Partners in LLP
A partner is defined as any person who has been admitted as a partner in the LLP in accordance with the LLP agreement.
Every LLP shall have at least two partners.
The partner in an LLP can be an individual, a local company, a foreign company or another LLP.
Managers in LLP
A manager is defined as any person who is concerned in or takes part in the management of the LLP.
Every LLP must have at least one manager who is an ordinary resident in Singapore, a natural person of full age (i.e. at least 18 years old) and of capacity.