Category Archives: Company Registration

Why Is Singapore Preferred For Incorporation By Start-Ups?

While Singapore hasn’t (yet) knocked Silicon Valley in the United States off as the breeding ground for the most startups in the world today, many expect them to continue developing Silicon Valley Lite in Southeast Asia – and some expect that they will be the most influential hotbed for startups in the coming decades.

Offering a number of benefits that simply aren’t available in the United States (or anywhere else in the West, for that matter), Singapore has been able to really distinguish itself from other nations while building a reputation for being about as business friendly as it gets. Here are some of the reasons behind why so many are choosing to incorporate their startups here than anywhere else!

A tremendously business friendly government that is as stable as they get

It’s almost impossible to find a more business friendly government anywhere in the world than the one that has been in place in Singapore for decades.

According to the World Bank, Singapore is the easiest place to do business, the third wealthiest nation in the world, and has a government that provides a significant amount of assistance, funding, and influence to start a businesses and other enterprises – regardless of whether or not they have been started by natives of Singapore are citizens of the world that come here to help build their business and the Singapore economy at the same time.

Situated smack dab in the heart of Southeast Asia with easy access to Asian markets

Situated in the heart of Southeast Asia, with access to billions and billions of people, startups that are establishing themselves in Singapore have a significant advantage and head start over startups that are being founded half a world away in the West.

This kind of access has been mitigated a little bit by the interconnectivity of online communication, but nothing beats having an active presence “in the backyard” of Southeast Asia the way that Singapore does.

Has tremendous infrastructure already in place to help startups succeed

Singapore has invested very, very heavily into their own infrastructure to build up this city state as much as humanly possible. Their public transportation is fantastic, their quality of life is off the charts, they are Internet speeds are amongst the highest in the world, and the entire city state just feels completely connected, modern, and very forward thinking.

You’ll have unlimited resources to tap into when you decide to incorporate your startup here.

Offers incredible tax benefits not available in many other locations

Startups – and businesses in general – are all about increasing the bottom line as much as possible, and Singapore allows startups and other enterprises to do exactly that by lowering their tax burden so significantly that only a handful of other nations around the world can even come close to competing with the tax benefits provided here.

When you combine these tax benefits with all of the other big advantages that Singapore has to offer compared to other nations across the globe it becomes effortless to see why so many startups are choosing Singapore as their base of incorporation.

Why Is Singapore Preferred For Incorporation By Startups?

Singapore has really established itself as a headquarters for startup company, with companies starting to consider moving to Singapore just as much as they consider moving to Silicon Valley in the United States – something that would have been considered absolutely insane just a few short years ago.

This is not an accident.

The Singapore government and Singapore culture in general has always been very friendly towards business. But recently, a number of major initiatives put forth by the Singapore government as well as significant investments in technology and infrastructure have led to more and more startups flocking to Singapore than ever before.

Here are just some of the reasons why so many people – and so many savvy business owners – are considering moving their operations to Singapore today.

Incorporating a business doesn’t get any easier than this

The Singapore government has basically eliminated every single roadblock imaginable for companies looking to incorporate in Singapore, really paving the way and fast tracking the creation of these kinds of corporations just as much as humanly possible.

As we highlighted above, the government has always been friendly towards business. New regulations – or the removal of regulations, to be more accurate – makes it easier for foreign investors and foreign companies to set up shop in Singapore, taking advantage of the friendly business environment, amazing infrastructure, and high-technology landscape that Singapore has developed.

Effortless reach around the world

Because Singapore is located in Southeast Asia, more than 2.8 billion people – potential customers – can be reached in just a few hours by air, making it really easy to foster business relationships in the region that would have been difficult to start up and almost impossible to maintain when based anywhere else.

Breaking into emerging markets like Indonesia, Vietnam, Malaysia, and the Philippines would be next to impossible without operating out of Singapore. Combine that with the effortless reach to Japan, India, and even Australia – and that’s just the tip of the iceberg – and you will soon see why so many savvy business owners and investors are urging their companies to move to Singapore ASAP.

Government aid is at times overwhelming

Business owners ALWAYS want as stable a political infrastructure as humanly possible when they go to set up their companies, especially since these companies will likely exist (some form or another) in that country for decades to come – and any instability lends to a lot of volatility, and that’s never good for business.

Singapore has a tremendously stable government, a very orderly and organized government, and a government that many consider to be the friendliest towards business on the planet today. Not only will the government really move mountains to help you set up your startup in Singapore, but it will also provide smart and savvy startups with tremendous cash infusions, easy access to financing, government aid programs, and so much more.

If you’re serious about competing in today’s increasingly crowded startup marketplace, you’d have to be at least a little bit crazy to ignore these significant advantages incorporation in Singapore has to offer.

When Should You Register Your Company

Starting a new business is so exciting that when many people have the idea for a business they often get ahead of themselves. It’s important to make sure that you have all of your ducks in a row before incorporating your new business. There are a lot of considerations that the new business owner needs to understand and have plans for before taking the next big step.

What’s your plan?
Before you start a new business make sure that you have a strong business plan in place. If there are kinks in your plan or you have concerns about how the plan will translate to real life it’s best to discover that before spending money and time to incorporate. A good business plan will help you understand your goals, cash flow, and how you’ll network. Getting started without one is just silly.

Who will work at the business?
Are you going to hire employees? Or work for yourself? What if it doesn’t take off – or what if it does? Are you in a place where you can quit your current job? Or pay bills without a steady income while your business slowly grows? These are important questions to answer before jumping into your new business. Many people look to family when opening a new business, but this is something that won’t work for everyone. Family and friends can be tricky to work with – especially when tensions run high.

Capital
Another consideration the new businessman needs to think about is what kind of money they will be able to infuse into their new venture. Where will this money come from? How will you make sure that your cash flow works? Without emergency money to inject will your business survive? Sometimes the thrill of a wonderful idea takes over and logistics aren’t thought out. Without strong capital many businesses fail. Look into the possibility of a short-term business loan if you think that it’s a good fit for you. A business banker can help you with this decision.

If you are able to address the above concerns and are ready to take the next step then you need to decide what time of the year is beneficial for you to incorporate. If you don’t want to worry about reporting taxes for two years and don’t have concerns about liability, wait to incorporate on January 1. The paperwork for your new business will start fresh in the new year. If, however, you have liability issues to address or will benefit immediately from incorporating, don’t wait – do it now. If there’s no urgent need to incorporate immediately then it’s best to take time to make sure you are ready to open your new business. Rushing in can have grave consequences for the unprepared and your new business will need a solid foundation to start. Every business and business plan is different and it’s up to you as the owner to understand when is the best time for you. Tax advisors can be particularly helpful during this time for you to gain new knowledge.

Major global technology companies are expanding their operations in Singapore

Prime Minister of Singapore Lee Hsien Loong has always been serious about improving the economic base of Singapore, finding new ways to improve business relationships all over the world, and to build a “bulletproof economy” that can whether all of the financial storms that countries around the world are really struggling with today – and with new initiatives rolled out by his government in just the last few years he’s been able to do exactly that!

One of the biggest pushes of the government of Prime Minister Lee Hsien Loong has focused around finding ways to attract major global technology companies from all over the planet to Singapore, doing absolutely everything that the government can to improve the infrastructure, to cement international relationships, and to entice these business leaders to move their base of operations to Southeast Asia (and Singapore in particular) to the mutual benefit of everyone.

Recently returning from a weeklong visit to the United States where the prime minister met with representatives from all of the major companies in Silicon Valley, the Prime Minister was proud to announce to his people that major tech companies like Google, Facebook, and Apple already have large operations in Singapore but also have plans and intentions to roll out even larger operations in the coming years.

Expect the Singapore economic growth rate to skyrocket in the near future

This is fantastic news for those that are a little bit concerned about the slowing growth rate of the Singaporean economy.

According to information published in 2015, the economy had slowed by between 1% and 3% over the last five years, a little bit of concern for those in Singapore – even if it wasn’t the disastrous economic collapse that many nations had to contend with in the early 2000’s.

Singapore has been able to really insulate itself from that kind of disastrous economic gut punch while at the same time really pushing forward initiatives that ingratiate and intertwine their economy with the global economy. This is a delicate tightrope walk that not all countries could successfully pull off, but one that the theory business forward and business friendly Singapore government has been able to walk successfully for decades.

With the recent commitment from major tech companies in the United States to further expand their operations in Singapore many expect the economic growth rate to absolutely skyrocket in the near future and maintain that level of growth for years and years to come.

The tech sector is obviously one of the most exponentially growing areas of the global economy, and it certainly isn’t going to reverse trend anytime soon. When major technology giants that are already planning 10, 15, 20, 25 years in advance are committed to increasing their operations in Singapore it’s only a sign of fantastic things to come.

Google alone announced that they would acquire a number of local and “homegrown” businesses in Singapore in an effort to kickstart their Singapore engineering team, and Apple really wants to further invest in the region to streamline their supply chain and improve their operations.

How to start an Online Business in Singapore?

Online business is a famous business type in Singapore. Many people are interested to start their business on the Internet, so they can do all business activities from their own house or HDB units. There are many other advantages that people can have by starting this business in this country. It is not a difficult task to start this business on the Internet. People can sell their products or services to their customers on the Internet easily. However, people need to follow some useful steps for building an established online company in this country. Here are some effective tips for people who want to have a successful online company.

a. Do market research

This is the first important thing that should be done by all business owners. All people should do market research to find the right niche or topic for their businesses. Most Internet marketers usually start their online campaign with this procedure. This market research is very effective to find some potential opportunities that are available on the Internet today. People can also do keyword research when they want to find the right niche or topic for their online business. There are some useful tools that can be used by all Internet marketers to start doing this research.

b. Build infrastructure

When people are planning to build a successful online business, they have to start building the infrastructure. They have to choose the best hosting package for their sites. This hosting can be used to hold all important databases from the website. People also need to select the right domain from the domain market site. This domain is rented at very affordable price. After finding the right domain, all business owners need to start building their website. There are some web design service companies in Singapore. People can choose the best company that has good reputation among many customers these days.

c. Promote the website

This is another essential factor that should be considered by all website owners. They have to promote their sites, so they can improve the traffic or visitors to their sites. There are some effective methods that people can use to promote their own websites. Search Engine Optimization (SEO) is believed to be the most efficient way to attract free visitors to the site easily. Some people may want to use the social media marketing campaign for getting some visitors from some social media sites, such as Instagram, Twitter, YouTube, Facebook, and some other sites.

They are some useful tips for all people who want to build a good online business. This type of business is better than any other traditional businesses in Singapore. Therefore, many people want to create an established online business in this country. There are some advertising companies that may help all website owners promote their sites on the Internet. Hiring this type of company is very useful to improve the website performance significantly. Don’t forget to analyse all results from any online marketing strategies. Build a good online business to start earning a lot of money today.

Why is Singapore an ideal place to set up business?

Singapore’s quality lifestyle fascinates the world. The country is now best known for living peacefully with cultural diversity, offering a safe living environment to its residents, tax facilities, a world class business community and a very stable lifestyle.

There is no question about the fact that the country is growing as an ideal place for setting up new business empires. If the aspiring business community is thinking of migrating here, the major driving force would be –

Ease of doing business. The country has been very affable in terms of offering favourable business regulation policies. World Bank now ranks this place number one for this privilege.
Forbes Magazine ranks this place as the third wealthiest nation of the world.
As per Ernst and Young’s 2011 Globalization Index, Singapore has acquired the third position in the top 60 world’s largest globalized economy.
One of the most favourable country in terms of political stability.
Singapore has world’s most efficient human resource.
This country is best known for its quality of lifestyle.
In Singapore, nobody has to pay tax on capital gains or dividends.
Personal tax also ranges from 0 percent to 20 percent (for income above $320K)
Singapore has no death/inheritance/estate tax.

The section below outlines the major factors that encourage foreign investors and firms to set up their headquarter for Asia Pacific region(Tall and modern skyscrapers in business district of the city of Singapore)

1. Singapore’s Location: The Convenience of Connectivity

Singapore has excellent infrastructure and commuting facilities. The country is well connected through a busy port and internationally recognized Changi Airport. Apart from its own market consisting of 2.8 billion consumers, this place has easy access to Asia’s other major markets as well.

2. It’s a Business Encouraging Place

Singaporean Government is quick to offer business setup assistance. The country has easy business development policies in place, which can help foreign investors and entrepreneurs transform an idea quickly into a business.

3. It’s Unbelievable Tax System

Singapore has a very lenient personal and corporate tax structure. Personal tax starts from 0 percent and goes up to 20 percent, for people earning over $320K. Corporation tax applied to a private limited company is below 9 percent for profit of $300,000. Singapore has the lowest Goods and Services Tax (7 percent) compared to the global average of 16.4 percent and Asia Pacific average of 10.5%.

4. Cooperative Government

The Government of Singapore has always been highly accommodating in terms of providing a reliable and stable political system and developing encouraging pro-business regulatory policies.

5. Easy Migration Policies

The relaxed migration policies make it easy for the immigrants to put up a whole new business set up in this country. The Government has made a friendly work visa provision for the entrepreneurs who want to relocate to this country and intend to hire foreign professionals.

6. Have Skilled Human Resource

For entrepreneurs seeking skilled human resource, it will be easier to find compatible human power. Singapore has internationally recognized high level education and technical institutions to help aspirants get professionally equipped. The country has a good number of educated and technically proficient populations.

7. Convenience and Luxury of Lifestyle

Apart from this, Singapore has a cutting edge transportation and housing facility, health care system, schools, healthy environment and additional support systems for the local residents as well as foreigners relocating from other parts of the world.

8. Assurance of Property Protection

Business enterprises seeking assistance with intellectual property information protection will get the best arrangements in this country. Because of the country’s incomparable sincerity toward world class IP protection facility arrangements, the Political Economic Risk Consultancy, Institute for Management Development and World Economic Forum have ranked it top in the whole Asia. This place has also a very strict copyright protection law in place. In all, it can be said that the country has all good reasons to emerge as a business and finance superpower.

A lot more information about Singapore’s economy and the pace of development can be found on the Singapore Economy page. Similarly, information pertaining to taxation system can be availed on the Singapore Taxation page. The Singapore Political page gives a detailed insight of the country’s favourable political system.

What are some things to note before starting your business?

Before a company can be allowed to operate in Singapore, it must get the legal clearance from the registrar of companies who issues it with the certificate of incorporation that allows it to marry out its activities in Singapore. Most companies in Singapore are registered as private limited liability companies. A private limited company is a separate legal entity in which the company’s shareholders cannot in any way, be held responsible for the company’s debts beyond the amount of share capital they have contributed. The law allows any person above the age of 18 to register a company in Singapore.

Types of company formations

Before you can dream of registering your company you must know the different types of Singapore company formations and know the requirements needed for each and every type of formation. There are several types of company formations including sole proprietorships, partnerships, public companies and limited companies. Different types of companies have different sets of laws governing their operations and registration.

Regulations

It is also important to highlight that there are various legal requirements that any company will be required to meet before it can be registers to operate in Singapore. These requirements must be met by both local and foreign companies seeking registration.

Registration fees

In Singapore the government imposes a registration fee on every company that is seeking registration. The registration fee differs from one company type to the other.

Company name

Before the Singapore company registration, you must be well versed with the basic requirements. First, you must have a company name; the name should be the official name which will be used by the company as part of its identification.

Logo

As part of the registration requirement, the company might be asked to produce its trade logo. This requirement is normally imposed on large companies.

Directors

Before any company can be registered in Singapore it must have at least one resident director who must be a Singapore national. All company directors must be of 18 years and above and must possess a clean criminal record and must not be bankrupt. The number of directors will depend on the size of the company.

Shareholders

For any company to get the certificate of incorporation it must have shareholders. The number of shareholders might vary depending on the size and type of company; however the minimum number of shareholders can be even one as it is in the case of a sole proprietorship. The company has every legal right to transfer its shares to new shareholders after its incorporation.

Company secretary

It is a legal requirement for every company to have a company secretary who must be a qualified accountant. The company secretary must be a resident of Singapore.

Paid –up capital

The company’s paid-up capital can be increased any time after its incorporation.

Company address

Your company must have an official address because this is part of the registration requirement. The address includes the physical address, postal address, phone numbers and email addresses. The addresses help in easy identification and search of the company by both clients and the government.

Taxation

One of the major attractions for investors in Singapore is the huge tax incentives for companies from the government. Compared to other countries’, companies in Singapore are relatively low taxes. It is important to know the different tax incentives enjoyed by different types of company formations as well as the amount of taxes payable by each type of company formation. Different companies attract different amounts of taxes payable to the government.

Foreign companies

For foreign companies seeking registration in Singapore they must ensure that they have a representative office or branch in Singapore before they can be granted the certificate of incorporation.

Once all the above requirements have been met the company will be issued with its incorporation certificate and it will be free to proceed ahead with its day to day functions as a fully registered company. It is also important for any company to know the procedures and processes involved when dissolving a company and what factors can lead to the dissolution of a company. Another important aspect to know is that the government reserves the right to issue a certificate of incorporation to any company and it can also revoke the certificate if the company violates the set down rules.

How to start a Foreign Business in Singapore?

Starting any business in Singapore is easy as there are no major restrictions from the local government. Additionally, you need to have knowledge about various aspects related to the nation about the actual standards implemented by the official authorities so that you never experience any problems in the future for sure.

Given below are some of the important aspects that you need to consider in an extensive manner so that there are no problematic issues experienced for sure. All you need is to have proper control upon all the aspects in a proactive manner due to which realizing more benefits are easily possible for sure.

Fulfil the norms that are mentioned below in order to secure your objectives of setting up an establishment in Singapore for your latest requirements.

· Obtain a valid visa with Immigration and Checkpoints Authority
· Make all arrangements proactively for your increased benefits
· Register your business by choosing appropriate category
· Learn about the taxation guidelines in Singapore
· Seek additional assistance when needed

Understanding about all the above features in detail will help you in setting up a successful business in Singapore without having to go through any issues in the long run. Determine your priorities in a timely fashion as per the diverse needs you got on the whole.

Apply for Business Visa by Contacting ICA

Abiding by the visa rules set by the Immigration and Checkpoints Authority is very important so that you could commercially perform in Singapore in a perfect manner. You will be in need of Form 14 that must be filled completely and duly signed by the application along with a sponsor as well. The eligibility condition for securing a sponsor is such that he / she must be a citizen or permanent citizen of Singapore. Also, it is necessary to have a recommendation letter from the Singapore Economic Development Board so that there are no issues later.

Prior Arrangements to Be Made for Successful Business

The official website for business related queries in Singapore is business.gov.sg where you could obtain all those details that you need to start a business. Valid features too need to be considered in this regard so that you are able to realize increased benefits without having to go through any major issues on the whole. The availability of the business name that you consider too should be considered in order to ensure that there are no confusions later at the time of registration.

Contact Relevant Office for Registering Your Business Successfully

Different representations are available for you depending upon the kind of business that you would like to run. For instance, you need to contact Accounting and Corporate Regulatory Authority in order to ensure that a branch office of a foreign company is established. Similarly, it is necessary that you contact Monetary Authority of Singapore in order to set up a bank or lending firm. Irrespective of the firm you are bound to establish, it is possible to realize maximum benefits in precisely the same way as you anticipate the most.

Tax Benefits and Responsibilities for Businesses In Singapore

Any business that has been established in Singapore needs to pay tax as per the guidelines that have been framed accordingly. Enjoying seamless benefits is possible only when you learn about the rules and conditions due to which realizing more confidence levels is possible as per the requirement. Maximum tax benefits are provided to you in such a way that you are able to conduct your business in a highly satisfactory manner. Though it takes certain time to evolve fully after knowing the key concepts, you will be able to realize the best results after getting settled.

Valuable Assistance from Local Official Bodies to You

At times, there are some foreign business owners who are in need of maximum help so that you they could run their businesses successfully with ease. Contacting the Overseas Chambers of Commerce will ensure that you maintain the best results and features that you anticipate on an overall. Decide upon the right concept based upon which obtaining more benefits is possible to you with ease. Complying with the business rules and regulations too is easily obtained in this context as per the given situation for sure.

How to start a F&B business in Singapore?

Food-and-Beverage (F&B) service is among the booming businesses in Singapore, after recoding a massive growth in the last 5 years. The statistics shows that right from the 4,489 established in the 2005, this number has significantly increased to over 6,197 in the year 2010. If you want to enjoy the high returns in this industry, you need to make sure that you have the necessary tools that will make you enter the market and gain profits.

The following are some of the tips that you need to know on how to how to start an F&B outlet in Singapore:

1. You need to register your business entity under the Accounting &Corporate Regulatory Authority (ACRA)

You need to make sure that you have all the vital government-related licenses before making your application. They include the licenses to offer commence food and/or the liquor licenses (if you want to offer alcoholic products). This will always give you the permission that you need whenever you are operating at the same time giving you confident that you are operating within the law in Singapore.

2. Do your competition analysis

Just as starting any other kind of business, you need to make sure that have studied and made your analysis of your competitors well. In addition, you need to have an in-depth comprehension of the market that you indeed to enter. This means that you need to gather all the information that you need to make the best choice in the market. Most of the F & B establishments are often build on reputation around the innovative as well as creative presentations not forgetting the concepts to implement.

3. Do your survey and market analysis

You need to gather information from your competitors, before identifying the market segment, which you wish to make your target. This will enable you to make your analysis on how your brand needs to be positioned in the market. You should also carry out your survey when finding out more on the market segment, which you intend to enter. This will definitely help you come up with the strategies that you need to use in the market.

Get enough Capital

You need to know that huge costs are often involved whenever you are establishing this kind of business in Singapore. This means that you must have adequate capital that will enable you to put it up and at the same time enable it to grow in the first months when the sales are low. You should never start the business when you know that you do not have the capital to turn your business idea to a reality.

Enhance your operational Efficiency

Your success will always depend on how you support your customers at the same time with the way that you operate. This means that you have to make sure that you offer the best services that are available for your customers thus enabling you to win them back.

Service Excellence Customers

You must always put the priority of your customers first whenever you are offering these services. You need to know that when you satisfy a customer, the likelihood that you will retain him or her is definitely high and through this, you will grow your customer base.

You need to have a good PR and Marketing

You can never succeed in this kind of business if you lack a good PR and Marketing. This means that you must always make sure that you market your products that you offer to your potential clients. How do you do this? You must always try to use the modern avenues of marketing if you want to get many clients who need your services. This will not only save you on the cost but also reach a wider geographical area where you are offering your services.

Lastly you need to have the culinary standards.

You need to make your brand in the market through the marketing and making sure that you satisfy the wants of your customers. This will help you win more clients and at the same time enabling your business to grow at a faster rate while beating the competitors offering similar services.

In conclusion, the above 8 tips should assist you come up with the best ideas on how to achieve them while enabling you to start an F&B outlet in Singapore easily.

What are Exempt Private Limited Companies?

Have you ever wanted to incorporate a private limited company in Singapore? Here, the concept of Exempt Private Limited Company provided here can help you regarding the registration of your company in Singapore.

The entrepreneurs can incorporate a company as per the scope and nature of their business, from different types of entities possible in Singapore. A private limited company is one of the types of entities one can opt to incorporate as it automatically qualifies to be an Exempt Private Company as its shares cannot be held by more than twenty natural persons instead of any corporate body.

An amendment was passed in the Companies Law of Singapore in 2003 to introduce the concept of Exempt Private Company in the business field. It is one of the most favoured business entities in the business world of Singapore these days as it requires least compliance of rules and regulations. This compliance privilege had attracted a number of small Singaporean companies, which were private limited companies till the, to convert into Exempt Private Companies.

Exempt Private Companies:

Exempt Private Companies were exempted from statutory auditing requirements if their annual turnover remains below S$5 million. These companies can submit only a solvency declaration duly signed by the company’s secretary and directors instead of filing audited annual accounts.

A solvent exempted company can file its annual audited accounts with the Registrar of ACRA, if due to any reason it is unable to submit the declaration in the prescribed form. The audit of exempt private companies have been ruled out as it is normally done for protecting the interest of its shareholders but in most of these companies’ shareholders also work as its directors which give them the status of double entity. After recognizing the truth of this logic, this amendment was introduced in 2003.

You need not submit your annual accounts to ACRA if after declaring its solvency; your company files its solvency declaration in the prescribed form to maintain the privacy of its shareholders and directors. But, on the other hand, an exempt private company should prepare and present its accounting records and financial statements properly in compliance with the Singapore Financial Reporting Standards and Companies Act of Singapore.

Privileges of Full Tax Exemption

The privileges of full tax exemption extended to the companies in Singapore have been extended to the newly incorporated Exempt Private Companies also. Thus this tax exemption allows them to save lots of money in their first three years, after its inception, up to their annual taxable income of 300,000 Dollar.

These small savings in the cost of these exempted companies provide them bigger base level benefits as most of these companies are small in size. These companies can save substantial amount of money to be paid as auditing fees due to the exemption from the statutory formality of submitting annual audit report.

Exempt Private Companies are independent in regard to the guarantee for the internal company loans to its directors. Earlier a private company was prohibited by the section 163 of Companies Act to offer security guarantee against any loan or a loan to any other company in which its directors have interest more than twenty percent.

In the same manner, a company is prohibited to extend loans to its directors except for certain purposes, through Section 165. Such restrictions have not been imposed on an Exempted Private Company which provides greater flexibility to the directors of small company to control its earnings and assets.

Companies Law

Still, an Exempted Private Company cannot supersede the interest of the shareholders even after these privileges. The special provisions have been provided in the Companies Law to check and maintain balance in the working of these companies. The Companies Law in Singapore allows at least five percent of the company’s shareholders along with the Registrar of Companies to ask the Exempted Private Company to prepare and submit the report of annual audited accounts, in special cases.

Exempted Private Companies also enjoy all other benefits enjoyed by private limited companies along with these unique privileges including protection of shareholder’s assets, distinct legal entity, infinitely incredible image of the business entity and transfer of shares etc.

Thus in Singapore, an Exempt Private Company is considered as the main business medium these days due to its unique privileges.