Different types of companies .pdf
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Once you are convinced that you want to register
company in Singapore, it is 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
Here are all the important details about types of
companies in Singapore so that you can choose the
best option that’s applicable in your specific situation.
A Company is a company limited by shares i.e. its liabilities
are limited to the amount of share capital. A company is
incorporated by registering with Accounting and Corporate
Regulatory Authority (ACRA) of Singapore under
the Companies Act. It is a separate legal entity, meaning
there is a legal veil that separates owners from the entity. A
company can enter into contracts and own assets. It can
sue and be sued in its own name.
This is the simplest type of company and it’s easiest to
incorporate company in Singapore as Sole Proprietorship.
Personal assets and those of the company are under the
owner’s name, meaning they are not protected. If the
company is in debt, then personal assets are legally not
beyond the reach of creditors.
This type of company is best suited for individual shop
owners or solo entrepreneurs. It’s important that the risks
involved in operating such a company are clearly understood
before going for registration.
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.
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.
In Singapore, this is the most common type of partnership
structure in the 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.
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. This partnership is
the best for business where
professionals have a joint practice. It
requires a great deal of organization
and planning beforehand.
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. If you are a professional who is
looking for starting a business with several
partners in your field, then you can consider a
Limited Liability Partnership. The best choice for a
lot of business people and Entrepreneurs is a
private limited company set-up.