Singapore is a hub for business in Southeast Asia
When it comes to business in Southeast Asia, Singapore stands out as a hub for entrepreneurs. Registering a company in Singapore has numerous benefits, including access to a highly skilled workforce, a pro-business environment, and favorable tax rates. There are four main types of business structures available to entrepreneurs who want to register a company in Singapore. In this article, we will go through each of these four business structures and explore their advantages and disadvantages.
Sole Proprietorship or Partnership
Sole proprietorship is a business structure that can be owned and controlled by an individual, a company, or a limited liability partnership. There are no partners in a sole proprietorship. It is not a separate legal entity from the business owner, and the business owner has unlimited liability, which means they are personally liable for all the debts and losses of the sole proprietorship. However, it can sue or be sued in the owner’s name.
Partnership, on the other hand, is a business structure owned by at least two partners, who can be individuals, companies, or limited liability partnerships. The maximum number of partners in a general partnership is 20. However, professional partnerships can have more than 20 partners. Examples of professional firms include engineers, lawyers, and architects. A partnership is not a separate legal entity from the business owners, and the partners are personally liable for all the debts and losses of the partnership. It can sue or be sued in the partners’ names.
Limited Partnership
A Limited Partnership (LP) is a partnership consisting of a minimum of two partners, with at least one general partner and one limited partner. An individual or a corporation may be a general partner or a limited partner of the LP. A general partner is responsible for the actions of the LP and is liable for all debts and obligations of the LP. A limited partner is not liable for debts and obligations of the LP beyond his agreed contribution, provided he does not take part in the management of the LP. LP does not have a separate legal entity from the partners, which means it cannot sue or be sued or own property in its name. During the registration of the LP, the lodger is required to indicate if the proposed LP falls under Regulation 12 of the LP Regulations.
Limited Liability Partnership (LLP)
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. This means that the LLP is seen as a body corporate and has a legal personality separate from its partners. The LLP has perpetual succession, which means any change in the partners of an LLP will not affect its existence, rights, or liabilities. The partners of the LLP will not be held personally liable for any business debts incurred by the LLP. An LLP is required to keep accounting records, profit and loss accounts and balance sheets that will sufficiently explain the transactions and financial position of the LLP.
Company
It is a legal requirement to register a business with ACRA if you want to operate a business in Singapore. Your proposed company name cannot be identical to an existing name or contain prohibited and undesirable words. Once your application is approved, you can proceed to incorporate your company. You must complete your incorporation within 120 days from the date of the name approval. There are 7 types of companies which can be incorporated in Singapore.
In conclusion, registering a company in Singapore can offer many benefits, and entrepreneurs have several options to choose from when it comes to business structures.
Each of these four business structures has its advantages and disadvantages, it is important to consider the needs of your business and seek professional advice before making a decision. If you want to know more about company registration in Singapore, you can contact Beaufort, a leading corporate services provider with extensive experience in helping businesses set up and operate in Singapore. Our team of experts can provide you with the guidance and support you need to navigate the complexities of Singapore’s business environment.