Singapore Private Limited Company
It has the right to own properties.
It is a legal entity, thus it can sue and be sued in its own name.
It has perpetual succession.
It must have less than 50 shareholders.
A. There must be at least one shareholder and one director of the private limited company. They can be the same persons. Usually banks and other financial institutions require two signatories, thus it is advisable to have at least two directors.
B. All the directors of the company must be 18 years old and above and at least one of the directors must be:
- a Singapore Citizen
- a Singapore Permanent Resident
- an Employment Pass holder
- an Approval-in-Principal Employment Pass holder
- a Dependant Pass holder
C. The directors must not be bankrupts or have been convicted of dishonesty.
D. A Business Name.Your business name must not be identical to that of another business or company registered in the Accounting & Corporate Regulatory Authority (ACRA). It must not contain obscene or vulgar words. Also, it must not be a reserved name, a type that the Minister has instructed ACRA not to accept for registration.
E. Registered Address. Before you can register a private limited company, you need to have a local address, or a registered place where you will conduct your day-to-day business. You must note the following:
- P.O. Boxes cannot be used as a registered business address.
- If you wish to use your Housing & Development Board (HDB) flat, also known as public housing, you need to seek permission from HDB.
- If you wish to use your private home, you need to seek permission from the landlord in question.
F. The minimum paid up capital for setting up a private limited company is only S$1.
G. There are a few businesses that require you to obtain licenses and permits before you can begin incorporating a private limited company. Some of these businesses are private schools, childcare centers and video companies.
H. The Companies Act Cap 50 requires private limited companies to employ a qualified company secretary within six months of its registration.
Advantages and Disadvantages
The benefits of setting up a private limited company includes:
1. Clear Structures. Clear structures are presented in the Companies Act, which govern the procedures to be complied with by all locally registered companies.
2. Limited Liability for Shareholders. If the company fails, the shareholders may lose their shares, but not their personal properties.
3. Transfer of Ownership. You can transfer ownership of a company by transferring or selling shares, subject to the private limited company’s constitution.
4. Legal identity. A private limited company can enter into legal agreements, can own property and can sue or be sued.
5. Perpetual Succession. A private limited company will continue to exist even if its shareholders or directors resign, pass away or go bankrupt.
Among the disadvantages of setting up a private limited company are:
1. Private limited companies are more expensive to set up than other types of business entities.
2. Private limited companies are regulated by tighter rules and policies.
3. A director of a private limited company may be removed from his position by a mere resolution passed by the company’s shareholders.
4. Winding up a private limited is more difficult, will take time and more costly.