A Guide to the Company Structure in Singapore

Tech

If you want to incorporate Singapore company, the first step is choosing the business vehicle. You have to do this before even settling on a company name. The type of company you open depends mostly on the nature of your business. Likewise, foreigners somehow have ‘limited’ options when registering a company type in Singapore, even if it won’t matter a lot.

Here are the types of businesses in Singapore:

Sole Proprietorship

A sole proprietorship consists of investments from a single investor. The single investor needs to put his/ her own funds in the company, as the company doesn’t have a unique legal identity of its own.

Only locals can open a sole proprietorship in Singapore. It is mostly suitable for small businesses with limited capital. Furthermore, a sole proprietorship has its own risks, as the business is the ownership of someone so the owner will be liable for the losses.

Partnership

A partnership, similar to sole-proprietorship doesn’t have a legal identity. However, instead of a single person, many partners make investments in the partnership. A partnership company in Singapore can have between 1 to 20 partners.

There are two types of partnerships in Singapore:

General partnership: In a General Partnership, every partner makes equal investments. Thus, they share the profit equally.

Limited Partnership: In a limited partnership, some partners don’t get the same amount of profit as the others. This is because they make lesser investments than the ‘general partners.’

Limited Liability Company

When it comes to limited liability company, it has many types and can be differentiated in many ways.

Company Limited By Guarantee

Guarantors make sure that they will give contributions if the company goes under or is lacking funds. Companies limited by guarantee are great for non-profit organizations.

Company Limited by Shares

A company limited by shares is the ideal business form for all investors. A company limited by shares is a legal entity, and instead of ownership, it has shares, which can be transferred between people. Depending on the type of share acquisition, these are hte types of a company limited by shares:

Private Limited Company

In a private limited company, the shares can only be traded in by the shareholders.

Public Limited Company

A public limited company is a very big company in which the general public can buy the shares.

These are the conditions to fulfil for you to open a private limited company:

  • A resident director.
  • A resident secretary.
  • A physical office address.
  • Between 1 to 50 shareholders.

Branch Company

A branch company is an extension of the parent company. In a branch, the profits and the liabilities go to the parent company. Furthermore, the branch has the legal identity of its parent company. This means that the entity name and the allowed activities should be equivalent to the parent company.

Subsidiary Company

A subsidiary company is similar to a branch in a way that it is an extension of an existing company. However, it has more freedom than a branch company. A subsidiary can have a different name and conduct different business activities than the parent firm. Furthermore, it can have its own profit and liabilities.

Representative Office

The last type of company if you want to incorporate business in Singapore is the representative office. Actually, a representative office doesn’t conduct business activities but is mostly for administrative purposes only. For example, an international company can send a representative office to Singapore if they first want to research the market. People may, or may not be notified about the existence of a representative office.