Private Limited Company Registration in Singapore

Starting a private limited company is a popular choice. Many businesses in Singapore choose it. You can recognize them by names like ‘Pte. Ltd.,’ ‘Private Limited,’ or ‘Private Ltd.’ Knowing about different business types is the first step when incorporating a company.

Keep in mind that with a private limited company, you can’t sell shares to the public for funding.

Publicly trading shares is only allowed for public limited companies. They can only do so on the Singapore Stock Exchange .

But, private limited companies offer advantages like limited liability, protecting the owners.

There are many advantages of private limited companies. Thus they are popular among entrepreneurs and small and medium-sized enterprises (SME).

Learn more about the company incorporation process. Please contact us for a free consultation on company registration. And we will help you along the way.

Many experts say that starting a private limited company in Singapore is popular. Especially new business owners.

Unlike public companies, private limited companies don’t sell shares on the stock exchange.

This type of company can have up to 50 shareholders.

A private limited company is a separate legal entity. This means the owner’s personal assets are separate from the company’s.

The company can sue and be sued. But the owners aren’t personally responsible for company debts.”

After incorporation, your private limited company can own property.

Singapore’s law requires private limited companies to have 1 to 50 shareholders. Having fewer than 1 or more than 50 won’t work during the incorporation process.

Once incorporated, private limited companies in Singapore may qualify for local tax exemptions.

They can also receive government incentives. No matter where the directors or shareholders come from. Even foreign businesspeople can benefit from these local incentives.

There are different types of legal structures to use when you incorporate a company. But, a private limited company is the most preferred one. Both by local and foreign individuals.

• A private limited company is not at risk of their personal assets. There is limited liability to its shareholders to their capital. That ties with the shares of the business.

• It has a separate identity from its owner and it is a legal entity.

• A private limited company is required to pay corporate income tax. It must also responsible for all debts the business acquires.

• The company can own property.

• A private limited company is eligible for local tax incentives and exemptions.¹

To incorporate a private limited company, ACRA has some minimum requirements, including:

• You need at least 1 director who is a resident of Singapore.
• You must appoint 1 local company secretary.
• You should have at least 1 shareholder, who can be an individual or a company.
• You’ll need at least a paid-up capital of S$1 SGD².
• Your company name must be approved by ACRA.
• You must have a physical office with a local registered address.
• Private limited companies have basic requirements for incorporation.
• This is alike to sole proprietorships or partnerships in Singapore. The main difference is that there must be a local to provide secretarial services. He or she is responsible for all administrative tasks under The Companies Act.

• Dividends are tax-free. Tax is deducted from all the profits of the company at corporate tax rates. 

• There is limited liability. Shareholders are not liable for debts and losses of the company. 

• Ownership of the company can be transferred hassle-free. There can be more shareholders acquired. 

• As a private limited company is a separate legal entity, it does not stop to exist if one or more shareholders die.

Challenges and Post-Registration Activities:

While there are many advantages, the registration process can be challenging. After registration, tasks include opening a corporate bank account and filing annual returns. They also include getting a company stamp, holding AGMs and managing tax filings.

Status of a Private Limited Company:

Registering a private limited company in Singapore boosts your business’s public image. And notably with banks. It increases the chances of attracting investors or securing bank loans.

Limited Liability Protection:

Setting up a private limited company offers directors protection for their personal assets. Reducing worries about business uncertainties or economic downturns.

Special Tax Benefits for Locals:

Local Singaporean entrepreneurs can benefit from special corporate tax exemptions and schemes. Available only to citizens and PRs who register a private limited company locally.

Continuity in Case of Owner’s Unforeseen Events:

The private limited company business operations continues. Even when the owner’s dies or have a serious injury. The appointment of a new director will be decided by the shareholders.

• Breaking the rules while incorporating a company leads to penalties and severe consequences.
• Owners incorporating a private limited company in Singapore must follow the Companies Act. This means they need to handle extra administrative tasks like Financial Reports . They also include Meeting records, Annual Returns, and filing of Annual General Meeting
• They also need to comply with the Singapore Companies Act. This increases the operating expenses of the newly formed Private Limited Company.

The Private Limited Company’s Business Name

You should have an idea of a business name. Before finding a company incorporation services provider such as WLP Group.

To register a private limited company, the business name has to be approved by ACRA. It is a need before you can start a business. The business name requirements are:

• The company name must not be identical or alike to another existing business entity’s name.

• The company name must not be vulgar, obscene or offensive.

• The company name must not be banned by order of the Minister for Finance.

The proposed business name requirements are stated above. Here is guide on how to choose a business name³. If not ACRA will reject the application to incorporate a company due to the business name.

Local Directors and Shareholders:

• If you want to register as a director or shareholder, you need to be a citizen or Permeanent Resident.(PR). You must not be bankrupt or disqualified in the past as a director by ACRA. Contact an experienced company registration consultant for more info.

Foreign Directors and Shareholders:

• Regardless of residency, all foreigners applying to incorporate a company in Singapore. Must appoint at least one local director. The same applies for foreign companies set up in Singapore.At least one of them must be a resident of Singapore (citizen, PR, or hold certain passes). They also need to provide proof of residency in their home country. For more on this, consult an experienced incorporation consultant.

Shareholder’s Details (Corporate Entities):

• Corporate entities must provide their business profile during the incorporation process. Only then can they become shareholders of a private limited company in Singapore.

Secretary:

• All Singapore companies must appoint a secretary within 6 months of incorporation.

Registered Address:

• All business entities, including private limited companies in Singapore. A physical registered business address in Singapore is required for Private Limited Companies. P.O. Box addresses are not allowed.

Singapore Standard Industrial Classification (SSIC) Code:

• The SSIC code describes your business activities. A newly registered company must have at least one SSIC code, with a maximum of 2 matching its nature. Include this in your incorporation application. You can find SSIC codes using the SSIC Code Search tool on ACRA’s website.

Paid-up Capital and Issued Shares:

• State your paid-up capital the number of issued shares during the incorporation process . This information will be in your Business Profile.

Finished with the business registration process & registered a private limited company in Singapore? Congratulations on registering your private limited company in Singapore! This is the first big step toward becoming a successful entrepreneur. But, there are some important things to do after registration.

Step 1: Log onto your ACRA company business profile

• Log in to your ACRA company business profile.

• Ensure that all details are accurate. Including company name, your name, and registered address.

• Verify the registration date and details of shareholders and partners.

• Mistakes in ownership details can be costly to fix later.

Step 2: Check your business GST requirements

• Depending on your company’s activities, you may need to register for GST (Goods and Service Tax).

• Businesses with an expected turnover of more than SGD $1 million must register.

• Failure to register for GST can result in penalties, so ensure compliance with ACRA and the IRS.

Step 3: Check and make a copy of your certificate of incorporation

• The certificate of incorporation is a crucial document. It is issued by ACRA and the Singapore government.

• It confirms your company’s incorporation and government recognition.

• You will receive a registration number along with an automated email.

• Consider requesting a physical copy for safekeeping. Through ACRA’s online platform for a small fee.

The image on the left is an example of the certificate of incorporation that will be issued by ACRA.

To make your business legal:

• Registering a private limited company in Singapore makes your business legal.

• Without proper incorporation, starting operations can lead to many problems. Such as government issues, penalties, and legal actions against business owners and shareholders.

• Registering first is essential before beginning business operations.

To enjoy Singapore’s business benefits:

• Registering a private limited company in Singapore offers many benefits.

• It allows 100% ownership for all. Including foreigners, and enables repatriation of 100% sales to their home countries.

• Tax incentives, such as no tax on dividends and initial tax breaks, are available.

• Singapore has double taxation agreements with over 50 countries. And offers tax credits for entrepreneurs from other nations.

• Registering qualifies your company for these benefits.

To legally hire skilled Singaporean workers:

• An incorporated company can hire skilled Singaporean workers. They are fluent in English and excel in their roles.

• Registered businesses are preferred by workers. As they ensure legal compliance and proper compensation and benefits.

To benefit from Singapore’s Strategic Location and Strong Economy:

• Singapore’s strategic location in Asia makes it a business gateway to neighboring countries.

• The country’s robust economy, driven by infrastructure development and a corruption-free government. Thus it offers a secure environment for business growth.

• Registering a company in Singapore provides opportunities to expand your business across Asia.

We have gone through the pros and cons of a private limited company in Singapore. We provided insights into the things needed to incorporate a company in Singapore.

Incorporating a new  private limited company in Singapore will be full of opportunities. With the right assistance & effort, this business entity can bring many successes. There are necessary requirements to follow when deciding to incorporate a company. With our expertise in company incorporation, your business will be right on track. 

For more information, contact an incorporation consultant such as WLP Group. We are very experienced in incorporating companies in Singapore. Setting up a local company is a big step to take in your entrepreneurship journey. And we can definitely help you kick start your company today! 

At WLP Group, we can help you with all your business needs and enquiries. For setting up a private limited company in Singapore. Feel free to contact us at +65 6493 2970 for more information. And to find out more about the company incorporation fees!