FAQ

File Estimated Chargeable Income (ECI)
(Jun year-end) 30 Sep 2021

File GST return
(1 Jul – 30 Sep) 31 Oct 2021

e-File Corporate Income Tax return (Form C-S/ C)
30 Nov 2021

File Estimated Chargeable Income (ECI)
(Sep year-end) 31 Dec 2021

Sole-proprietors and partnerships are not required to file financial statements with ACRA. Filing of financial statements (PDF / XBRL format) is only applicable to companies. All incorporated companies are required to file their financial statements with ACRA in XBRL format except for those who are exempted.

A full financial statement includes

• • Cash flow statement
  • Statement of financial position
  • Statement of profit or loss
  • Changes in equity
  • Financial notes or comparative information

A business organisation where 2 or more (up to 20) people come together to do business is a partnership. The partners collectively are the business. Partners jointly have ownership of assets. Administrative costs are slightly higher and accounts are slightly more complicated compared to a sole proprietorship. If the partnership wishes to grow bigger than 20 persons, it must incorporate. A partnership exists and continues in law subject to partnership agreement.

Registration can be done by any natural person who is 18 years and above. Foreigners who wish to set up this type of business structure in Singapore would have to appoint a Singapore resident manager who is above 21 years of age. A local Singaporean physical address is required for registration. Registration must be renewed and can be done for a period of one or three years.

For more information on the advantages and disadvantages of a partnership, please click on ‘Tips’.

A Limited Liability Partnership (LLP) company is a business organisation that combines the best aspects of partnerships and companies. This is also a popular business structure in Singapore due to its flexibility and scalability. Shareholders can be corporate entities, individuals, or both. This type of business organisation has at least 2 partners to an unlimited number of people.

For more information on the advantages and disadvantages of a limited liability partnership, please click on ‘Tips’.

A company is a business form of one or more people doing business under a separate “name” (a separate legal entity) and the different types of companies include being private or public.

The persons who own the company are called ‘shareholders’ or ‘members’, but the director(s) are the persons who do the actual running of the company. Companies may be small, medium or large businesses. However, administrative costs are high as the law requires certain minimum accounts to be kept. A company is usually run by a board of directors, of which the director(s) may or may not be a member of the company. Requirement to fulfill for directors in a company is that the director(s) has to have a minimum age of 18 years old and the company must at least have one director who is a Singapore Citizen.

For more information on company and the different types of companies, please click on ‘Tips’.

A Private Limited Company is a company that is set up directly and operates as a separate legal entity to its directors and shareholders, which means that the company is an ‘individual’ in its own right. A Private Limited is the most flexible and scalable company structure in the country. For such a legal entity, the shareholders could either be corporate entities, individuals or both.

A Private Limited Company is limited to a maximum of 50 shareholders, or 20 shareholders for private exempt companies. Shareholders are allowed to be foreigners as 100% foreign ownership is allowed. Shareholders may either be natural persons, corporate entities or a mixture of both. This setup is one that is limited in liability, with their shareholder’s liability being limited to the shares they put into the business. This means that all the business assets, liabilities and profits belong to the company itself and the shareholders are not wholly responsible for debts incurred by the company.

Directors of a Private Limited company are regarded as employees of the company, and in the event of a legal disagreement or debt problems, the Private Limited company is sued or pursued rather than the directors. That is the true beauty of the definition of a separate legal entity. In contrast to a sole proprietor, who is personally liable for any unpaid debts or legal fees originating from a dispute or insolvency, if the company fails, the director’s personal assets, such as the family home or savings, are not at risk.

A Private Limited Company does not publicly trade shares, are allowed to own property in the company’s name and it can also sue or be sued in the company’s name. Additionally, a Private Limited company is typically seen as a more professional operation as compared to an incorporated sole proprietor due to the transparent nature of the business accounts which needs to be made public, alongside with the details of the directors and persons of significant influence.

Most Private Limited companies are small as there is no minimum capital requirement to incorporate a limited company aside from the issuing of at least one share at $1. The accounts that are filed with accountancy firms are also usually modified accounts. A Private Limited has to pay a corporate tax at the rate of 17 percent. There are two partial exemptions available from the assessment year 2020 and onwards.

Private Limited companies would be able to get capital funding from banks and financial institutions easier than sole proprietorships. This makes it easier to attract investors as well. This business structure also needs to appoint a Company Secretary and has to submit annual returns to ACRA.

The Private Limited Companies can also register its ownership over the properties it acquired by virtue of sale or any other modes of acquisition under its own name. It can also participate in legal and litigation proceedings. This means that a Private Limited Company can sue and be sued in courts of law, for purposes of prosecuting a claim for its name against third persons or defending against a claim filed against it by such parties. Lastly, a Private Limited Company still continues notwithstanding a change in the structure of shareholdings or death of any of its shareholders. It still allows for easy transfer of shares even if there are deaths or change in stockholders.

For more information on the advantages of setting up a Private Limited Company, please click on ‘Tips’.

There is no restriction in 100 percent local or foreign ownership of a limited liability company. A local Pte. Ltd. can be fully owned by a foreign shareholder.

The registration of a Private Limited Company is usually done with the Accounting and Corporate Regulatory Authority in Singapore (ACRA). Under normal circumstances, the company incorporation can be done in the shortest time possible (within a day) and the pricing is generally very competitive. The requirements for this corporate set up are as follows:

• At least one resident director who must be ordinarily resident of Singapore. The director must then be an individual who is a Citizen or a Permanent Resident of Singapore or one who has secured an Employment Pass Entrepreneur Pass and is currently residing in Singapore, at least 18 years of age, and not declared by virtue of court order to be a bankrupt or previously convicted of a crime.
• If a foreigner wishes to act as a local director of the company, he can apply for an EntrePass from the Ministry of Manpower
• Undischarged bankrupts cannot be a director and cannot manage a company without approval from the Court or the Official Assignee
• The shareholders can be either be an individual or a corporate shareholder
• Initial paid up capital must be at least $1. Paid up capital refers to the amount of subscribed shares that is already paid upfront by the company.
• At least one Corporate Secretary of the company who shall be a resident of Singapore. The secretary should satisfy the minimum qualification requirements under the Singapore Companies act regarding accreditation and lack of disqualifications. The company secretary must be appointed within 6 months of incorporation
• The Company requires an office address in Singapore which is not a P.O. Box
• At the time of incorporation, the company will be assigned with a Unique Entity Number (UEN)
• An approved company name which is original and ideal for brand identity. It is forbidden under Singapore’s IP Law to use a corporate name which is undesirable and deceptively or confusingly similar to any existing trademarks or corporate names.

Must appoint an auditor within 3 months after incorporation, unless the company is exempt from audit requirements according to yearly statutory requirements. Annual returns must be filed. Statutory requirements for general meetings, directors, company secretary, share allotments must be complied with.

A Private Limited (Pte Ltd) company would be a recommended choice of structure for foreigners due to its feature of limiting partners’ liabilities, simple registration and favourable tax rates (17%) among other aspects. Business expansion would be easier for the owners and partners of the company as well as the Company are able to allot shares to new shareholders whenever an increase of capital is required. Banks are also more inclined to offer bank loans to the Company with this business structure as it is deemed to be more credible.