OVERVIEW
Setting up a company in Singapore requires you to follow local business regulations while complying with laws and tax obligations within your chosen legal entity. Singapore supports mainly 5 different types of business structures with specific benefits and considerations that fit your situation.
Whether you’re running the business on your own or with partners, choose the structure that best suits you. See Our Incorporation Services & Pricing Plan customised to your needs.
What types of business entities are there in Singapore?
There are 5 different types of business entities in Singapore namely Sole Proprietorship, Partnership, Limited Partnership (LP), Limited Liability Partnership (LLP) and Local Company. Let’s take a look at the following features of these business structures.
5 DIFFERENT TYPES OF BUSINESS STRUCTURES
Sole Proprietorship
A business owned by one person, where the owner has unlimited liability. This means you are personally accountable for the debts, losses and legal actions of your business.
Partnership
A business set up by two or more persons (of up to 20 partners). If your business is a partnership of more than 20 partners, you must incorporate as a Company under the Companies Act, Chapter 50.
Limited Partnership (LP)
A partnership consisting of two or more persons, with at least one general partner and one limited partner (no maximum number). General Partner is personally liable for debts and losses of the Limited Partner.
Limited Liability Partnership (LLP)
A business where two or more partners incorporate an entity separate from themselves. All partners have limited liability, ie. each partner is personally responsible for any debts and losses resulting from their own actions.
Local Company
A business entity incorporated in Singapore, separate from its shareholders and directors. Members have limited liability and are not personally liable for debts and losses of the company. The most commonly chosen type in Singapore is the Private Limited Company.
FOUR DIFFERENT TYPES OF LIMITED COMPANIES:
- Exempt Private Company
– Most common type of company in Singapore.
– Name usually ends with “Pte Ltd”.
– Can have a maximum of 20 shareholders.
– No shareholder is a corporation.
– Has a share capital.
- Private Company Limited by Shares
– Name usually ends with “Pte Ltd”.
– Can have a maximum of 50 shareholders.
– Corporations can be shareholders.
– Has a share capital. - Public Company Limited By Shares
– Name usually ends with “Ltd”.
– Can have more than 50 shareholders.
– May raise capital by offering shares to the public.
– Must register prospectus with MAS first.
– Liability of shareholders to creditors of the company is limited to capital originally invested by shareholders. - Public Company Limited By Guarantee
– Name usually ends with “Ltd”.
– Carries out non-profit activities of national or public interest, such as promoting arts, charity etc.
– Liability of members is limited to the amount which they undertake to contribute to the assets of the company in the event of winding up. This amount will be specified in the company’s constitution.
– Has no share capital.
THREE DIFFERENT TYPES OF UNLIMITED COMPANIES:
(ie. members or shareholders are personally liable)
- Unlimited Exempt Private Company
– Can have a maximum of 20 shareholders.
– No shareholder is a corporation. - Unlimited Private Company
– Usually has the words “Unlimited” as part of its name.
– Hybrid company incorporated with or without share capital. - Unlimited Public Company
– May have more than 50 shareholders.
– Corporations can be shareholders.
At One Accounting Services Singapore, we provide Company Incorporation Services for locals and foreign clients. If you’re a startup or SME looking for assistance in setting up your new company, our experienced team is here to guide you every step of the way.