- The diverse mix of business structures in Singapore caters to various needs of the business community. There present various familiar business structures which commonly used in the normal course of business. The common goal of this different business structure starts through registration. Many company owners register company in Singapore because of the tax benefits and the stable political along with the advantage of strategic location helps them to expand their businesses.
- The most important choice which has to be made by the company owner is to identify and choose a perfect business structure for the company. The business structure also determines the legal structure of that company. The choice of business structure impacts the company taxes, perception of the business, scalability, requirements of documents and paperwork, liability limited, ability to borrow, and expandability of the business.
- The business structures in Singapore is not complex. Every structure has its pros and cons which vary because of different regulatory policies of the country. The companies in Singapore are engaged in different forms of business which are private limited, limited liability, subsidiary, branch office, and representative office.
- For registering a business in Singapore the business structure should be chosen and after only which the registration procedure can take over. Every company no matter which business structure they have opted have to comply with rules and regulations prescribed by the accounting and corporate regulatory authority (ACRC). The authority has also introduced various formats in which a business can be operated which include sole proprietorship which includes sole-proprietor or partnership which includes more than two owners, further structure includes limited partnership, Limited liability partnership and company. It completely depends on the company owner to decide which business structure is the best fit for them.
Comparison of different business structures in Singapore
The comparison of different business structures in Singapore includes classifying and identifying those business structures which are:
Sole proprietorship
The sole proprietorship consists of one person who owns and runs the business. There is absolutely no-ones say in the business other than the Owner himself. Any Singapore citizen/ permanent resident/ employment passport/ dependent passport holder/ foreigner who is at least 18 years of age can open a company as a sole proprietorship. The business is most suitable for those who do not want to take more risk and thus, the business is not a separate legal entity. The Taxing Statue of the business registered as a sole proprietorship is taxed at personal tax rate and exemption will be applicable only if there presents any exemption on personal income. To register a business in Singapore as a sole proprietor it is time-efficient, easy, quick and easy to be registered with minimum cost with annual renewal.
Partnership
When compared with a different business structure in Singapore it consist of more than two members with a maximum of 20 members as the partner. Any Singapore citizen/ permanent resident/ employment passport/ dependent passport holder/ foreigner who is at least 18 years of age can come into a partnership agreement but a local manager must be appointed if it is controlled by foreigners. These companies are basically advised for accountants, lawyers, and professionals who want to provide services by registering the business in Singapore. Thus, the company is a separate legal entity and partners have unlimited liability. The taxation is applicable on at personal income tax basis which is applied on the share of income of partners and personal tax exemptions if applicable are also provided. Registering a business in Singapore as a partnership firm is time-efficient, easy, quick and easy to be registered with minimum cost with annual renewal.
Limited Partnership
The partnership which consist of more than one person and has no upper limit and includes atleast 1 general partner. Any person who is a foreigner or local individual or a legal entity can become the partner but a local manager to the business is required. In this kind of partnership general partners have unlimited liability whereas the limited partner has limited liability. The taxation is applicable at personal income tax basis which is applied on the share of income of partners and personal tax exemptions if applicable are also provided. To register business in singapore as a limited liability firm it is time-efficient, easy, quick and easy to be registered with minimum cost with annual renewal.
Limited liability partnership
It is one of the newest business incorporations which is a partnership where the liabilities of partners are limited and there is no limit on the number of partners in the firm. Any person who is a foreigner or local individual or a legal entity can become a partner but a local manager of the business is required. It consists of the features of companies and partnerships which makes it suitable for partnership firms and private companies. It is a separate legal entity and partners are liable and blamed for the debts and losses because of their actions. The partners can also own property in the LLP name and can also get an exemption on personal tax if available. This business structure in Singapore is a new incorporation which is easy and quick to register and also easier to administer but requires the annual declaration of the solvency of the LLP by any one of the managers of the firm.
Private company limited by shares
It is one of the newest business incorporations which is a partnership where the liabilities of partners are limited and there is no limit on the number of partners in the firm. Any person who is a foreigner or local individual or a legal entity can become a partner but a local manager of the business is required. It consists of the features of companies and partnerships which makes it suitable for partnership firms and private companies. It is a separate legal entity and partners are liable and blamed for the debts and losses because of their actions. The partners can also own property in the LLP name and can also get an exemption on personal tax if available. This business structure in Singapore is a new incorporation which is easy and quick to register and also easier to administer but requires the annual declaration of the solvency of the LLP by any one of the managers of the firm.
Conclusion:
- The business structure in Singapore is vast and majorly easy to administer by the authorities. The business structure is designed for different kinds of business according to the risk, investment, number of members and various other aspects are there before choosing any business structure in Singapore. Hence, the structures mentioned are different from each other because of the factors involved but all are majorly easy and quick to be registered in Singapore.
- Contact us to know more about how to register a company in Singapore and our team of experts will revert within the next 24 hours. Tetra Consultants also provides assistance in various other fields of business formation which could be helpful for the legal entities and company owners. Tetra Consultants provide services such as assistance through offshore company incorporation, obtaining offshore financial licenses, regulatory compliance consultation, corporate bank account opening, international trademark registration and other ancillary services which are necessary to register the business in Singapore.
