FAQ on Company Incorporation
|What is a company?|
|A company is a business entity registered under the Companies Act with Accounting and Corporate Regulatory Authority(ACRA) or any law in force in Singapore. It has a legal personality i.e. it has rights to own properties, has perpetual succession and can sue or be sued in its own name. A company does not include sole-proprietorship and partnership businesses registered in or outside Singapore. It usually has the words Pte Ltd or Ltd as part of its name.|
|What is a business?|
|A business can be run by one person (a sole-proprietorship) or by two or more people together (a partnership) or through a limited liability partnership (LLP).|
|How is a company different from a business?|
|A business is not distinct and separate from the people who run it. For a private limited company, it is a separate legal entity in its own right. Therefore the directors and shareholders have limited liability as long as the business is operated legally and within the terms of the Singapore Companies Act.
If you own a business or are part of a partnership, you are personally responsible for the debts and liabilities and your personal assets can be taken by creditors towards payment of these debts.
|How do I register a company?|
|You register the company with the Accounting & Corporate Regulatory Authority (ACRA) to incorporate a company under the Singapore Companies Act. A registration fee is payable for the incorporation of a new company limited by shares.|
|What is the incorporation procedure?|
Minimum 1 shareholder, 1 director and 1 company secretary
Shareholders may be corporations or individuals and can owned 100% of its companies shares
At least one of director must be ordinarily resident in Singapore. i.e. Singaporean/ Singapore Permanent Residence (PR)/ Singapore Employment Pass Holder (We can provide you with a nominee resident director, if you require this service)
The same shareholder can also act as director
The company secretary has to be Singapore ordinarily resident
Sole shareholder and director cannot act as Company Secretary
Minimum initial paid-up share capital is S$ 1.00 Singapore Private Limited Company must have a local Registered address in Singapore
|Are there restrictions on names?|
|Yes, certain names including references to Government bodies and professional bodies will need justification. A name cannot be registered if it is the same (or sometimes, very similar) as an existing company unless a successful appeal is made to ACRA.|
|What is Memorandum and Articles of Association of the Company (M&A)?|
Memorandum and Articles of Association must be lodged with ACRA during incorporation of the company. The information reflected on the Memorandum is:
The Articles stipulate the rules governing the internal management of the company. We will provide you with an M&A which is in compliance with the requirements of the Singapore Companies Act.
|Are registered or bearer shares allowed?|
|Limited companies can only have registered shares.|
|What is the minimum number of shareholders?|
|One. The shareholder(s) can be a corporate body or an individual.|
|Who is a Company Secretary?|
|Every company must have at least one local resident Company Secretary. The Company Secretary is an officer of the Company.|
|What are the essential pre-requisites of Corporate Secretary?|
Under Section 171(1AB), the Company Secretary of a public company must possess at least one of the following qualifications:
a qualified person under the Legal Profession Act (Cap. 161).
an accountant registered with the Institute of Certified Public Accountants of Singapore.
a member of the Singapore Association of the Institute of Chartered Secretaries and Administrators or possess such academic or professional qualifications as maybe prescribed, and is capable of discharging the function of Secretary of the company.
|What are the duties of the Company Secretary?|
The duties of the company secretary may be divided generally into three main areas:
maintaining statutory registers
completing and filing statutory forms
meetings and resolutions
|Is a registered office required?|
|Yes, a company incorporated in Singapore must have a registered office in Singapore. We offer this service, inclusive of mail holding at a nominal fee of S$99.00 per annum.|
|What documents must be maintained at the registered office?|
|Are the documents available for public inspection?|
|Generally documents are open to public inspection, such as accounts, debentures, names of directors, share capital, particulars of any legal charges. However, some documents are only available for inspection to shareholders.|
|Are there requirements for annual audited accounts to be filed with the local tax (IRAS) and corporate (ACRA) authorities?|
An audit is only mandatory if:
However, all private exempt companies must prepare a report with annual accounts in accordance with the Singapore Financial Reporting Standards (FRS), signed by 2 Director(s) on behalf of the company. (Sole director will sign singly). FRS accounts have to be filed with our local tax authorities (IRAS).
|Must the company hold its AGM even though it is dormant?|
|Every company is required to hold its AGM and file its annual return even though it is dormant. However, the law has been amended to allow companies to dispense with AGM’s provided the requisite formalities have been finalized.|
|Where is the location for general meetings of shareholders and members?|
|Anywhere. The first meeting of shareholders must be held within 18 months from the date of incorporation to accept the Directors Report and Audited/FRS Accounts. A proxy can be appointed to attend the Annual General Meeting (AGM). After that, an AGM must be held once in every calendar year and not more than 15 months from the last AGM.|
|Is there any penalty for late lodgment of the annual return and accounts with ACRA?|
|There are penalties and composition fines for late filing this has to be paid to ACRA.|
|What annual tax is levied, and when is it payable?|
|Companies resident in Singapore are taxed on their income generated from Singapore. Net profits before taxes are taxed at 18% (YA2008). Although, for all newly incorporated Exempt Private Limited companies, there is tax exemption on the first $100,000.00 of taxable income (net profit after tax allowances and tax adjustments), for the first 3 years.|
|What is the minimum and maximum number of Directors permitted?|
|Any residential, nationality requirements or professional qualifications for Directors?|
|No there are no general requirements of residence or qualification (although one of the Directors must be a local resident Director). Undischarged bankrupts or persons subject to disqualification under the Companies Act Cap 50 cannot act as Director.|