In this article, we provide you with some basic information about the legal entities and vehicles available for conducting business in Singapore.

If you want to start a business in Singapore, do contact us.  We can provide a registered office, local managers, directors and local agents to fulfil legal requirements.

1. Business

Under the Business Registration Act of Singapore, all businesses must be registered.  A business can be a sole proprietorship or a partnership. A local manager is required if the owner(s) are not ordinarily resident in Singapore.

Sole Proprietorship

A sole proprietorship is a business owned by one person or one company. There are no partners. 

Partnership

Partnerships have between two to twenty partners.

2.   Company

A company has independent legal personality.  This means that it is able to own properties, it has perpetual succession and it can sue or be sued in its own name.  There are several types of companies

Private Company limited by shares

There are two types of private companies limited by shares:

(a) Private company

This is a Singapore incorporated company where the number of shareholders is limited to 50.

(b) Exempt private company

Generally, this is a private company with no more than 20 shareholders, none of which can be a corporation.  Within certain limitations, the exempt private company is exempt from audit requirements.

Public Company

There are two types of public companies:

(a) Public company limited by shares
 
A public company limited by shares is one in which the number of shareholders can be more than 50.  The company may raise capital by offering shares and debentures to the public. 

(b) Public company limited by guarantee
 
A public company limited by guarantee is one which carries out non-profit making activities that have some basis of national or public interest, such as for promoting art, or charity etc.

Branch of a Foreign Company

Branches of foreign companies can be registered in Singapore. Any person who wishes to register a branch of a foreign company is advised to engage a professional, to assist him in the preparation and filing of the application for registration.

The Companies Act requires a foreign company to appoint two local agents in Singapore to act on behalf of the company. The agents must be ordinarily resident in Singapore.

3.  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.  This means that the LLP has perpetual succession, so that any change in the partners of an LLP will not affect its existence, rights or liabilities.

The LLP is required to submit to the Registrar an annual declaration of solvency or insolvency which will be made available to the public. Every LLP must have at least one manager who is ordinarily resident in Singapore.

4.  Limited Partnerships

It is a partnership consisting of at least one general partner and at least one limited partner. An  LP does not have a separate legal entity from the partners, i.e. it cannot sue or be sued or own property in its own name.

Appointing a local manager is necessary if all the general partners are residing outside Singapore.

A general partner is responsible for the actions of an LP and liable for all debts and obligations. A limited partner is not liable for debts and obligations of the LP beyond his agreed contribution, if he does not take part in the management of the LP.

5.  Representative Office

Foreign companies that are exploring the viability of doing business in Singapore, or in using Singapore as a base for market penetration into the Asia Pacific, may set up a Representative Office (RO). An RO has the benefit of allowing a foreign company to test out the business environment in Singapore before committing to any investment decisions. The RO can only conduct market research, feasibility studies and liaison work on behalf of parent company.