Different types of companies and which singapore company incorporation is best
Once you’re convinced that you want to register company in Singapore, it’s important that you know the type of company or business entity that you want to incorporate, such as Sole Proprietorship, Partnership, Limited Liability Partnership, or Limited Partnership.
It’s important that you know the various available company types in Singapore as well as pros, cons and details about each of them so that you can take a correct and inform decision.
Here are all the important details about types of companies in Singapore so that you can understand their nitty-gritty and choose the best option that’s applicable in your specific situation.
Limited Liability Company
A Limited Liability Company (LLC) is a company limited by shares i.e. its liabilities are limited to the amount of share capital. LLC is incorporated by registering with
Accounting and Corporate Regulatory Authority
Companies Act. It is a separate legal entity, meaning there is a legal veil that separates owners from the entity. LLC can enter into contracts and own assets. It can sue and be sued in its own name.
There are 3 types of LLCs in Singapore:
Private Limited Company (Pte. Ltd.):
Private limited company incorporation in Singapore is the choice of a lot of small and medium size business entities due to several benefits that it offers.
-The shareholders are not held responsible for company debt that surpasses share capital contributed.
- The company’s shares belong to limited people, usually a few individuals or corporate entities and and are not available to the public at large.
- -The company’s shares belong to limited people, usually a few individuals or corporate entities and and are not available to the public at large.
- -Shares can easily be transferred
- - it has easier means to raise capital
- -it commands a better credit image than a sole proprietorship or a partnership firm, and investors would usually show more interest in being the part of company.
Public Limited Company:
Different from a private limited company, the shares of a public limited company are often available to the general public. These companies will be found in stock exchange. The number of shareholders is at a minimum of least 50 people. Given that these types of companies involve the public at large, there are more rules and regulations that avoid exploitation and the misuse of public funds. This option is best for large businesses.
Public Company Limited by Guarantee:
Unlike private and public limited companies, this type of company is mainly setup for non-profitable purpose. It is conceptually a public company formed along the principle of limiting the liability to the amount that members contribute to the assets of the company.
Sole Proprietorship
This is the simplest type of company and it’s easiest to incorporate company in Singapore as Sole Proprietorship.
It’s however the riskiest considering that unlike of LLC, the owner of a Sole Proprietorship company is seen as part and parcel of the company. They are thus, more liable to suffer risks that arise from the business.
Partnership Company
A partnership company does not exist legally on its own without its partners. Membership ends upon death, retirement or insolvency. There are three types of partnership structures in Singapore: general partnership, limited partnership and limited liability partnership.
General Partnership:
This business structure is similar to a sole proprietor. The business partners are personally liable for the business liabilities and debts. The partners share responsibility as one is held accountable for the actions of a fellow partner. It is not the best business structure in Singapore as it contains a lot of risks.
Limited Partnership:
In Singapore, this is the most common type of partnership structure in company. This is because the liabilities are limited to the company’s investments. The risks to all the partner’s personal assets are thus limited to how much they invest into the business. The partners cannot however manage the business.
Limited Liability Partnership (LLP):
This is basically a structure where a registered LLP gives the partners the freedom to run the business and contribute to its management. This company comes along with benefits similar to those found in a private limited company.
Conclusion:
All the business entities and structures are best suitable for different scenarios. A local in Singapore would for instance work best with a Sole Proprietorship if they are the only owner and if the products and services do not present risks and liabilities.
Read here for complete details:
http://precursor.com.sg/different-types-companies-singapore-company-incorporation-best/