Can More Than One Llc Flow Into A S Corp Selecting Appropriate Business Structure Is Important To Incorporate a Company in Singapore

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Selecting Appropriate Business Structure Is Important To Incorporate a Company in Singapore

They say it’s easy to start a business in Singapore. However, ‘they’ can’t tell you the intricacies and twists involved in setting up a business in Singapore. When setting up a business in Singapore, the first hurdle you will encounter is choosing the right business structure. To a large extent, outsourcing the company registration process in Singapore to an external company is a widely accepted option. However, it is important to understand the different business structures in Singapore before hiring any company that offers business registration services in Singapore.

Different business structures for setting up a company in Singapore

Normally, foreigners do not need any type of government approval to set up a new business in Singapore. Singapore allows approximately 100% foreign ownership, making it the best and most convenient location for foreign entrepreneurs to do business.

The establishment of a bank or financial institution requires the approval of the Monetary Authority of Singapore. Let’s take a look at the different business structure options that entrepreneurs have for setting up a business in Singapore.

  • Representation: A foreign company that is willing to have a presence in Singapore but does not intend to carry out any business activities here must establish its company as a representative office. Singapore’s business environment sees a representative office as an administrative arrangement intended primarily for non-commercial activities. Therefore, the registered office will not have any kind of separate legal status from its parent company. Please note that Singapore does not allow a registered office to carry out any business activities for the purpose of generating revenue and profit.
  • branch office: Foreign companies that are not interested in setting up a separate company in Singapore with a different name should prefer to set up a branch office. After establishing a branch, it is possible to carry out activities under the name or brand of a foreign company. A branch established in Singapore is legally considered an extension of its parent company. Please note that the branch will in no way be treated as a subsidiary owned by the foreign parent company. The Singapore Companies Act does not prescribe any separate or separate Articles of Incorporation (MAA) for branches. The branch is free to conduct its shareholding structure and business activities in accordance with the instructions of the original MAA of the foreign company.
  • Subsidiary: A private limited liability company that has a foreign company as a major shareholder should incorporate its operations as a subsidiary. The Subsidiary is a resident company of Singapore and governed by the laws of Singapore. The subsidiary has legal status in Singapore and is therefore treated as a different company from its foreign counterpart. In this option, the liability of the foreign company is limited to the share capital it has invested. In addition, the foreign company is excluded from the debt obligations and liabilities of the subsidiary company. Note that a subsidiary company is more often registered than a limited liability company in Singapore.
  • Established companies: Singapore offers two main options for incorporated companies; Limited liability companies and public companies. A limited liability company can have up to fifty shareholders and also has restrictions on the transfer of shares. In contrast, a joint-stock company has no such restriction and can have any number of shareholders. In addition, a joint stock company can raise capital by offering shares and debentures to the public. Incorporating companies can register with a minimum capital of S$1 obtained by at least one shareholder, one director and one company secretary. It is fine if the chosen shareholder is an individual or a company. None of the shareholders are required to be domiciled in Singapore. Note that the liability of shareholders is limited to the amount, if any, of the outstanding shares issued to them. In addition, there is a fixed par value of S$1 for each share, and no par value shares and bearer shares are not allowed.
  • Limited Liability Partnership: If two or more partners want to set up a company in Singapore, registering the company as a Limited Liability Company (LLP) is the best option. Within this partnership entity, ACRA identifies the two partners as distinct persons who can sue or be sued. In addition, both partners are allowed to own property in their own names. In VŽU, partners are offered the opportunity to operate independently or as a joint entity. Note that although the minimum number of partners required to form an LLP is two, there is no limit to the number of partners an LLP can have.
  • Limited partnership: A limited partnership appears to be a flexible business structure for entrepreneurs who are not interested in assuming any responsibility for the management functions of the business. Such entrepreneurs usually hand over their company management to a completely different entity. The chosen entity can be an individual or a company with unlimited liability. A limited liability company has more than one general partner and more than one limited partner. Note that if general partners choose to participate in a business capacity, they become liable and their personal assets are pledged. In contrast, limited partners are only liable for the amount they contributed.
  • Entrepreneur: A sole proprietorship is the simplest and easiest business structure to set up a business in Singapore. Foreign and local entrepreneurs generally prefer sole proprietorship as their business structure. Investors with less capital and big dreams, as well as investors interested in starting small businesses, register their business more often than sole proprietorships. Legal requirements stipulate that self-employed women will have to register all their gainful activities that they perform on a daily basis. Note that a sole trader is not considered a separate legal entity. The owner and his company are treated as one and the same. The entrepreneur or the owner is responsible for all debts or obligations that arise in the course of business.

Conclusion

Deciding on the right business structure to start a business in Singapore is a difficult task. Incorporating a company according to a precise business structure is very necessary if you plan to do business in Singapore. It is highly recommended that you seek professional help to register your company in Singapore. Singapore incorporation experts will help you understand each business structure, along with its obligations and future implications. Remember that the rules regarding obligations and responsibilities in Singapore are very strict. Only startup experts will be able to guide you in the best possible way. They will help you incorporate your dream business without much risk.

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