Singapore Business Classifications
A Company is a business entity registered under the Companies Act, Chapter 50. It has a legal personality i.e. it has rights to own properties, has perpetual succession and can sue or be sued in its own name. It usually has the words 'Pte Ltd' or 'Ltd' as part of its name.
- Separate legal entity. Members are not personally liable for debts and losses of company
- Types of companies
- Exempt Private Company –20 members or less and no corporation holds beneficial interest in the company’s shares
- Private Company – 50 members or less
- Public Company – can have more than 50 members
- At least one shareholder (can be person or corporate)
- At least one local ordinarily resident in Singapore (Foreigner has to apply for an Entrepass from Ministry of Manpower - http://www.mom.gov.sg/passes-and-permits/entrepass/apply-for-a-pass)
- Taxed at corporate income tax rate and able to enjoy company tax reliefs
Limited Liability Partnership
A Limited Liability Partnership (LLP) gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company.
- Partners will not be held personally liable for any business debts incurred by the LLP. A partner may, however, be held personally liable for claims from losses resulting from his own wrongful act or omission, but will not be held personally liable for such wrongful acts or omissions of any other partner of the LLP.
- LLP shall submit to the Registrar an annual declaration of solvency or insolvency (i.e. being able or unable to pay its debts respectively) which will be made available to the public.
- Generally used by law and audit firms.
A sole-proprietorship is a business owned by one person or one company. There are no partners. The sole-proprietor has absolute say in the running of the business.
- Not a separate legal entity and owner has unlimited liability
- Can be owned by Singapore citizen/Singapore permanent resident/ Entrepass holder
- Registration cost lower and less compliance cost compared to companies.
- Taxed at owner’s personal income tax rate (no company tax relief)
A partnership is a business firm formed by two to twenty partners. Once there are more than twenty partners, the partnership must be registered as a company under the Companies Act, Cap. 50.
- Similar to sole proprietorship.