1. Sole Proprietorship
This is a one-man business which is not a separate legal entity. The owner is entitled to all the profits and losses. He is also personally liable for any obligations or debts incurred by the business. Self-employed persons must top-up their Medisave account before they register a new business name.
A partnership is made up of 2 to 20 people. The partners will share the duties, profits, and losses depending on the terms laid out in the partnership deed. They are personally liable for debts incurred by the business.
NOTE: Since they are not corporate entities, partnerships and sole proprietorship are not required to file annual accounts. However, they are required to renew their registration yearly. They also have to furnish IRAS with their annual returns.
3. Limited Partnerships (LP)
Limited Partnerships comprises of a minimum of one general partner as well as one limited partner. A general partner, who may be a corporation or an individual, is personally accountable for an unlimited liabilities or debts incurred while he is the general partner. Limited partners are only responsible for up to a certain limit as specified in the contribution or partnership agreement.
4. Limited Liability Partnerships
Limited Liability Partnerships (LLPs) is where the individual partner’s own liability is limited to the amount of capital contributed. They are not personally responsible for any debts of other partners. A partner is personally responsible for any loss caused by his negligence or oversight. Nonetheless, the law offers protection to people dealing with LLP. The partners and the business are treated as separate entities.
5. Local Companies
The owners and company are treated as separate entities. At least one of the directors has to be a Singaporean, a holder of Entre Pass, or a Singapore permanent resident. The company is registered under the Company Act and may be limited or unlimited. Companies are limited by shares or guarantee. In the case of a limited shares firm, the individuals or corporate do not need to be reside in Singapore.
The main types of companies are:
Local Private Company
- Private Limited Companies (PLC) is made up of less than 50 shareholders. Shares limit in accordance to Singapore Companies Act.
- Shareholders have limited liability.
- Exempt or Deemed Exempt Private Limited Company: This is a private company comprising of not more than 20 members. There will be no corporate shareholders. However, when turnover is more than S$5 million, the company is no longer said to be deemed exempt.
- Exempt Private Company: This is a company owned by the Government and has been declared exempt through the Minister Gazette.
Local Public Companies
- Company Limited by Shares: The Company can have more than 50 members. Their capital is collected by issuing debentures of shares to the public. Prior to offering the debentures or shares to the public, it has to register its prospectus with ACRA.
- Company Limited by Guarantee: These Companies will be formed by non-profit organizations.
6. Foreign Company
Foreign company is a company, society, corporation, association, or any other body formed outside Singapore. Under the foreign law, which allows the company to be incorporated, it should be possible to sue the company. The company will be able to hold property.
7. Non-Trading Representative Office
This is a form of foreign ad-hoc company which only operates for a short term. It is usually to start exploring business ventures, market surveys, or trade leads in Singapore. The goal is always to test the waters before establishing the company.
To find out more about the types of companies in Singapore, give us a call.