Singapore Private Limited Company Registration
Opting for a private limited company registration gives you an opportunity to implement a highly dynamic and scalable legal structure for your business purposes. It is the best option available, and you do not need to upgrade it. ACRA’s process for company registration in Singapore is easy and free of red-tape.
What is a Singapore Private Limited Company (Pte Ltd)?
Singapore offers different types of business or legal structures for setting up a new business. However, a private limited company is the most preferred one.
Advantages of Singapore Pte Ltd
- Pte Ltd is limited by shares. Its shares are held and sold privately and not on stock-exchange
- The major benefit of a Pte Ltd is that it limits the liability of its shareholders to their capital tied up in its shares
- It is responsible for its debts and losses. Its assets are used to pay these
- Shareholders’ personal assets are not used to pay the company’s debts and are not at risk
- It is a legal entity and has a separate identity from its owners (shareholders)
- It pays corporate income tax on its chargeable income
- It has credibility and can easily raise capital for its expansion
Key Requirements for Private Limited Company Registration
- Approved company name
- Minimum initial paid-up capital of S$1
- 1 – 50 shareholders
- At least 1 local or resident director
- At least 1 company secretary
- A local registered physical address
Documents for a Company Registration in Singapore
You need to be careful in choosing the name for your company. ACRA, the Company Registrar of Singapore, rejects names that are identical or similar to the names of existing businesses.
A memorable company name is important for building a brand. It should also point clearly to your primary business activity.
Nowadays, the customer expects you to have a business website. So register identical or similar names for the company and website. It will make it easy for you to brand your business.
You need to describe your business activities in your application for incorporating a Singapore business. Use appropriate Singapore Standard Industrial Classification Code (SSIC) to do so.
You need S$1 as minimum initial paid-up capital at the time of company formation. Singapore private limited company issues one or more shares to its initial shareholders. Later on, it can raise additional funds by issuing additional shares.
A properly drawn shareholders’ agreement defines rights and obligations and relationships between shareholders. It comes in handy in overcoming future disputes and disagreements.
Particulars of Shareholders
You need at least one shareholder (corporate or individual) to set up a company in Singapore. Locals, as well as foreigners, are allowed 100% shareholding in such a company. As per the Companies Act, a private limited company can have as many as 50 shareholders.
Particulars of Directors
You need to appoint at least one local or resident director for your new company. Choose an individual ordinarily resident of Singapore: a Singapore citizen, Permanent Resident or an EntrePass holder with a local address. A shareholder can also act as a director.
Registered Office Address
You need to put a registered physical office address on your application to set up a Singapore company. It is used for official communication. It cannot be a P.O. Box address.
Home Office Scheme allows you to use a local residential address with prior permission from the concerned authorities.
Company Secretary Particulars
You need to appoint a qualified company secretary in Singapore within 6 months from the incorporation date of your company. Or, you can employ one from a reputed registered filing agent.
Memorandum & Articles of Association (M&AA)
The memorandum part of this document details the activities your company intends to take up. And the Articles of Association part defines the rules for its internal management.
You can pay the required fees to ACRA and get a standard M&AA document for your use. If you want a customized M&AA to address your specific requirements, hire a competent company secretary to prepare it for you.
Hire an Auditor
As per the law, every Singaporean company must employ an auditor within three months from its incorporation date unless it is exempted from audit requirements. A private company is exempted from this obligation if it can be classified as a “Small Company” or belongs to a “Small Group.” earlier, Exempt Private companies having S$5 million or less revenue use to get audit exemption.
Certificate of Incorporation
ACRA issues a Certificate of Incorporation after the successful registration of the company. It sends an email containing a soft copy of the document. You can obtain the hard copy of a certificate by paying appropriate fees to ACRA.
The Certificate of Incorporation is an important document as you need it for entering into the trading agreements, business contracts, transactions with other governments and their agencies. The certificate proves the legal existence and nature of your company.
Company’s Business Profile
You can pay ACRA fees and get the business profile of your company. The document gives the company name, its Unique Entity Number (UEN), date of incorporation, intended business activities, paid-up capital, registered address in Singapore, and particulars of its stakeholders like shareholders, directors, & company secretary.
The company secretary issues share certificates to the shareholders of the company. It shows the number of shares allocated to each one of them and serves as proof of their ownership in the company.
First Board Resolution
Within a month after the private limited company registration, its Board of Directors must meet and pass resolutions regarding its functioning. These may be recorded in the same or separate documents.
Through the resolution, they appoint the ordinarily resident director to the board. They also pass a resolution to employ a company secretary.
Resolution for Opening of Bank Account
A Pte Ltd company is a legal entity having a separate identity from its stakeholders. It needs its own bank account for its transactions.
So its board has to pass a resolution to sanction the opening of the bank account in the company’s name. They also specify in it the signatories to the account.
Additional Requirements of Company Registration in Singapore
Opening a Corporate Bank Account
Your and other stakeholders’ physical presence is required to open the bank account for your new Singapore company. You need to submit a board resolution sanctioning the move and copies of the incorporation certificate, business profile, and M&AA.
Singapore citizens must submit a copy of their national identification cards. Foreigners need to submit a copy of their passports. You also need to submit proof of residential addresses of the directors and ultimate beneficiary of the company.
You also need to send for the company stamp. It adds to the credibility of the company when you use it on official documents and correspondence. The company documents displaying Unique Entity Number (UEN), registered address of the company, and official rubber stamp looks profoundly authentic.
AGMs and Annual Returns
Convening AGM on time is one of the compliance requirement for every Singapore company. The company has to hold its AGM every calendar year except the starting year.
The management has to prepare the company accounts and table the financial statements for the inspection of the shareholders. They have to file the company’s Annual Returns to the ACRA within one month of the AGM.
Filing of Tax
Singapore private limited companies pay company income tax on their chargeable income. Its deadline is 30th November of every year. Afterwards, they can disburse tax-free dividends to their shareholders.
End of Financial Year
The board has to decide on when the company’s financial year is going to end. They can choose whatever date is convenient for business purposes.
The new companies benefit by keeping it 365 days long. They get to enjoy the benefits of the Startup Tax Exemption scheme.
Under this scheme, for the initial 3 years, startups can claim 75% of tax exemption on their first S$100,000 of chargeable income. Next, S$200,000 gets 50% tax exemption.
As per the World Bank report 2020, Singapore is the 2nd best place for doing business. The government supports startups with several grants and tax exemption schemes. For most Singapore companies, the effective tax rate comes to 8.5%-9.5%.
Company registration in Singapore is an easy task. You can further simplify it by appointing a registered filing agent. These agents can legally transact with government agencies, submit the necessary documents, and pay, on your behalf, the private limited company registration fees to ACRA.