Your choice of business entities and structures for your business matters. Selecting the best choice for your company will give you the best possible head start and affect how you conduct your business in the long run.
Before proceeding, make sure you have submitted an online application to register your business name.
As a top business hub in Asia and the world, Singapore has one of the most efficient frameworks and systems for setting up a business. It’s tremendously fast and easy to set up and operate a business, and the entire process can sometimes take less than a week.
In this post, we will share four main types of business entities and structures, factors to consider when selecting one, and the rules and regulations you are most likely to face.
Lastly, we will also provide a detailed comparison of the different types of entities and structures available for businesses in Singapore.
Business entities, also known as business structures, are formed under Singapore’s law to engage in business activities, philanthropic work, or other allowable business activities. The legal responsibilities, advantages, and disadvantages differ and will depend on the type of business entity chosen.
A business can be a sole proprietorship with one owner or a partnership consisting of two to twenty owners. Business owners are personally liable for the debts and losses of the business.
In a Limited Partnership or LP, there is a need for a general partner and a limited partner. While the general partner is personally liable for the debts and losses of the LP, the limited partner enjoys limited liability.
This is also known as limited liability.
Every business is unique and has different needs. Having answers to the following factors will allow you to determine the ideal entity and structure for your business.
If you are finally ready to decide on a business entity and structure, make sure to adhere to the following guidelines:
Definition: A business owned by one person
Owned By: One person
Legal Status:
Yearly Statutory Obligations:
Registration Requirements:
Set Up Fee:
Taxes: Profits taxed at owner’s personal income tax rates
Continuity in Law: Exists as long as the owner is alive and desires to continue the business
Closing the Business:
Definition: An association of two or more persons carrying on business in common with a view to profit
Owned By:
Legal Status:
Yearly Statutory Obligations:
Registration Requirements:
Set Up Fee:
Taxes: Profits taxed at partners’ personal income tax rates
Continuity in Law: Exists subject to partnership agreement
Closing the Business:
Definition: A partnership consisting of two or more persons, with at least one general partner and one limited partner
Owned By:
Legal Status:
Yearly Statutory Obligations:
Registration Requirements:
Set Up Fee:
Taxes: Profits taxed at partners’ personal income tax rates (if individual)/ corporate tax rate (if corporation)
Continuity in Law:
Closing the Business:
Definition: A partnership where the individual partner’s own liability is generally limited
Owned By:
Legal Status:
Yearly Statutory Obligations:
Registration Requirements:
Set Up Fee: $115 ($15 name application fee and $100 registration fee)
Taxes: Profits taxed at partners’ personal income tax rates (if individual)/ corporate tax rate (if corporation)
Continuity in Law: The LLP has perpetual succession until wound up or struck off
Closing the Business:
Definition: A business form which is a legal entity separate and distinct from its shareholders and directors
Owned By:
Legal Status:
Yearly Statutory Obligations:
Registration Requirements:
Set Up Fee: $315 ($15 name application fee and $300 incorporation fee)
Taxes: Profits taxed at corporate tax rates
Continuity in Law: A company has perpetual succession until wound up or struck off
Closing the Business:
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