Are you considering converting your sole proprietorship or limited liability partnership (LLP) into a private limited company in Singapore? The process may seem daunting, but with the right knowledge, it can be a smooth transition. In this article, we will guide you through the steps involved in effectively converting your sole proprietorship or LLP to a Singapore private limited company, also known as a Pte. Ltd. corporation.
Register for a New Singapore Pte Ltd Company
To begin the conversion process, you will need to incorporate a new Singapore Pte Ltd company. It’s important to note that ACRA (Accounting and Corporate Regulatory Authority) does not allow the direct conversion of one company entity to another. Therefore, you must register a new company with a unique name. However, if you wish to use the same business name, you can file a No Objection Letter to ACRA, providing justification and evidence that both the sole proprietorship or LLP and the Pte Ltd company have the same owner.
Transfer Your Business Matters to the New Pte Ltd Company
Transferring your business matters from your sole proprietorship or LLP to the new Pte Ltd company is a crucial step. Here is a checklist to guide you through the process:
- Assets
The net assets acquired by the Pte Ltd business can be converted into paid-up capital. To do this, a resolution and an agreement are required. Before transferring your assets, ensure that any outstanding debts with your creditors are settled. - Bank Account
Close the bank accounts under the sole proprietorship or LLP entity and open a new account under the Pte Ltd company. Inform your clients and stakeholders about the account change and request that all future checks be written in favor of the new Pte Ltd company. - Lease Agreement
If your business rents an office space or property, terminate the lease agreement under the sole proprietorship or LLP and sign a new lease agreement under the Pte Ltd company. - Contract Agreements
Terminate any existing business agreements or contracts under the sole proprietorship or LLP and sign new agreements or contracts under the new Pte Ltd entity. - Permits
In most cases, permits and licenses cannot be transferred. Therefore, the new Pte Ltd business must apply for a new set of all the required permits and licenses. - GST Register
On the day of incorporation, cancel all GST registrations for the previous sole proprietorship or LLP businesses. Apply for a new GST registration to resume your company operations. - MOM / CPF Account
To transfer employees’ accounts for CPF (Central Provident Fund) and MOM (Ministry of Manpower), complete and submit the necessary paperwork to initiate the process.
Terminate the Old Sole Proprietorship or LLP Company
Once the new Pte Ltd company is incorporated, the previous sole proprietorship or LLP must be closed within three months. To close the old entity, send a Notice of Cessation (NOC) to ACRA to confirm the company closure.
In the case of an LLP, after successfully transferring all matters to the Pte Ltd company, you have the option to wind up or strike off the LLP. Striking off is a less complicated procedure compared to winding up. To strike off your LLP, ensure that:
- There are no unpaid debts associated with the LLP.
- All ROC (Registrar of Companies) filings are completed before submitting a strike-off application.
- The LLP has been inactive or inoperative for at least one entire financial year.
Ready to Convert Your Sole Proprietorship or LLP to a Pte Ltd Company
Deciding to convert your sole proprietorship or limited liability partnership (LLP) to a Singapore private limited company or a Pte. Ltd. corporation is a wise choice. However, it’s important to seek professional guidance to ensure a seamless conversion process. Our team of experts is here to assist you in making this transition.
Converting your business entity to a private limited company offers numerous advantages, including a separate legal identity and better access to SME loans. By following the steps outlined above, you can effectively convert your sole proprietorship or LLP into a Pte Ltd company in Singapore.
Make an appointment with us today, and we will provide you with the right legal referral to ensure a smooth and successful conversion. Don’t hesitate to seek professional assistance when making important business decisions like this. Let us help you navigate the process and unleash the full potential of your company as a private limited entity.
Remember, converting to a private limited company can open up new opportunities for growth and provide you with the legal framework and benefits necessary for long-term success in the business world. Take the necessary steps today to convert your sole proprietorship or LLP to a Pte Ltd company and embark on a new chapter of success for your business in Singapore.