Leftirght Mobile Logo
Contact
Favicon-512-x-512
Contact
Leftirght Mobile Logo
Call Us
Slim-White-BG-Short-Logo

Types of Business Entities in Singapore

Written By: admin

Table of Contents

Last updated: July 28, 2019

Of all the choices you make when deciding on incorporating an entity in Singapore, one of the most important factors is the type of business structure (i.e. legal entity) you choose for your business. Your decision can affect the amount you pay in taxes, the image and perception of your business among your clients and suppliers, the amount of paperwork your business is required to do, the personal liability you face, the ability to borrow money, and the possibility to expand your business.

The following are the business entity types in Singapore:

  • Sole Proprietorship
  • Partnership
  • Company
  • Limited Liability Partnership
  • Limited Partnership
Type of entity Information on business structure
Sole Proprietorships
    • For Singaporean and Singapore Permanent Resident individuals.
  • The sole proprietor is entitled to all profits of the business and is personally liable for all debts and obligations
Partnerships
    • Suitable for 2 or more persons (limited to 20) who come together with the objective of making a profit
    • Profit is distributed among the partners
  • All partners are personally liable for all debts and obligations
Limited Partnerships
    • Similar to a partnership, except partners are split into general partners and limited partners (at least one of each). No limit exists of the total number of partners.
    • General partner(s) can be either a corporation or an individual and they are personally liable
  • Limited partner(s) are not liable for debts or other liabilities of the partnership beyond the agreed contribution.
Limited Liability Partnerships (LLP)
    • Combines the advantage of operating as a partnership while giving owners the benefit of limited liability.
    • Liability of partners are limited to their contribution, and are not personally liable to the obligations of the LLP apart from losses resulting from their own negligence.
    • The downside of LLPs is that they come with law restraints so as to prevent abuse and protect parties who deal with the LLP.
    • Unlike sole proprietorships and partnerships, LLP is a corporate body and has a separate legal personality.
  • LLPs have perpetual succession.  
Local Private Companies Private Limited Company

    • Companies limited by shares
    • Shareholders not personally liable for debts of limited companies
    • Liability is limited to amount of shares issued to them which they have not paid for
  • Number of shareholders is limited to 50

Exempt Private Limited Company

    • A subset category of private limited companies.
    • Exempt private limited companies have less than 20 members (none are corporate entities)
  • Turnover should be under $50 million
Local Public Companies Companies limited by share

  • Number of shareholders can be more than 50 members and the company is allowed to increase capital by offering share to the public.

Companies limited by guarantee

  • Usually formed for non-profit making purpose (e.g charitable bodies, religious bodies, trade associations, etc)
Foreign Company
  • Any body, not principally located in Singapore, which under the law of its place can sue or be sued, or hold property in the name of the secretary or other officer of the body or association appointed for the purpose.
Representative Office
  • An interim entity which foreign companies that are keen on exploring the viability of doing business in Singapore can test the market before committing to decisions relating to investment

Who can Register?

  • Individuals and companies may set up and own a sole-proprietorship or partnership.
  • A sole-proprietorship or partnership, not being a separate legal entity, cannot register another sole-proprietorship or partnership.
  • A foreign company also cannot register a sole-proprietorship or partnership unless it has registered itself under the Companies Act, Cap. 50.

It is relatively simple for a Singapore resident to set up a business in Singapore. The first consideration is to decide on the right entity that will meet your business needs. The most common three business entities available in Singapore are sole proprietorship, limited liability partnership and private limited company.

Contact us to learn more about the type of entity that suits your business the best.

Related Articles

Registering your business doesn't need to be complicated.

Incorporate Now

Starting a business doesn't need to be complicated.

Start Now