A company is an incorporated association. Once it is formerly registered, it becomes a separate legal person. It is an artificial person created by incorporation. The company can sue and be sued in its own name. It can own property and incur debts. The liability of its shareholders is limited to any amount unpaid on their shares. When the shares are fully paid-up, the shareholders have no further liability to contribute towards the debts of the company.
Incorporation Of Private Limited Company
A company is an incorporated association. Once it is formerly registered, it becomes a separate legal person. It is an artificial person created by incorporation. The company can sue and be sued in its own name. It can own property and incur debts. The liability of its shareholders is limited to any amount unpaid on their shares. When the shares are fully paid-up, the shareholders have no further liability to contribute towards the debts of the company. In Singapore, a company is incorporated under the Companies Act, Cap. 50 and the statutory requirements and the incorporation process are as follows:
Mandatory Requirements to Start a Company in Singapore
Every company must have a registered office in Singapore to which correspondence may be sent. The registered office need not be the place of business but it has to be a place that is open and accessible to the public for not less than three hours during ordinary business hours each day, excluding Saturdays, Sundays and public holidays.
Every company must appoint at least one company secretary who shall be a natural person and has his principal or only place of residence in Singapore. With effect from 15 May 2003, the requirement to appoint a “qualified” company secretary as specified in Section 171(1A) of the Companies Act, Cap. 50 has been removed for private limited company. Hence, any person who is locally resident can be appointed as the Company Secretary.
Every company registered under the Companies Act, Cap. 50 must appoint an auditor within three months from the date of incorporation, except:-
- Companies that meet the “Small Company” criteria for a financial year starting on or after 1 July 2015
- For a company which is part of a group:
Company must qualify as a small company; and entire group must be a “small group”.
- Small Company is defined as Private Company throughout the financial year and meet at least 2 of 3 criteria for immediate past two financial years:- total revenue for each financial year ≤ $10m; *value of total assets ≤ $10m; *no. of employees ≤ 50 (*at the end of each financial year). New Company may qualify in 1st or 2nd FY.
- A group is a small group from a financial year if the group satisfies at least 2 of 3 criteria for immediate past two financial year:- group consolidated revenue ≤ $10m for each financial year; *value of consolidated total assets ≤ $10m; *group aggregate no. of employees ≤ 50 (*at the end of each financial year).
One Director/One Shareholder
With effect from 1 April 2004, the Companies (Amendment) Act 2004 now allows for a single person to incorporate and maintain a company i.e. the company can have a minimum of one director and one shareholder. The same person can be both the director and shareholder of the Company, however, the person must be locally resident in Singapore, that is, he must either be a Singapore Citizen, Singapore Permanent Resident, an Entre Pass Holder or Dependent Pass Holder. No corporate director is allowed.
With effect from 30th January 2006, the concept of par value and authorised capital have been abolished. Any amount paid as capital will constitute the paid up capital of the company. A flat registration fee of SGD 300 is payable to the Accounting and Corporate Regulatory Authority (“ACRA”). Every company must have a minimum of one issued/paid-up share. For the purpose of incorporation, the paid-up share capital of the company is usually fixed at the minimum of SGD1. The paid-up share capital of every company can be increased when the need arises.
Name Search and Incorporation Process
Points to Note When Selecting a Company’s Name
To avoid unnecessary delays in registration of a company, the following guidelines should be observed in selecting the intended names of the company:
- The intended name must not be undesirable.
- It must not bear a resemblance in sound or spelling to the name of another company or business firm as to be likely to be mistaken.
- The name of an existing company in another country should be avoided unless a franchise or a written consent has been obtained.
- The trade-mark or patent name of a product should not be used unless written consent from its owners has been obtained.
Information Required for Name Reservation and Incorporation of Company with ACRA
- Name of the proposed company
- Proposed principal activities of the proposed company
- Name, residential address and passport number of the first director(s)-one of whom must be locally resident
- Name, residential address and passport number of the first subscriber(s)/initial shareholder(s)-if different from above first director(s)
- Initial amount of issued/paid-up share capital for incorporation purpose we recommend to use the minimum amount
- Registered office address
The formal application with ACRA for approval on use of a proposed company is usually processed within 15 minutes after the name application fee is paid. However, the processing time may take between 14 days to 2 months if the application needs to be referred to another agency for approval or review.
Generally, the whole process of incorporation from the submission of name approval is within an hour. The hardcopy of certificate of incorporation will be available on the next working day, and at least 24 hours after successful payment.
Commencement of Business
When a notice of confirmation of incorporation is received from ACRA, the company may commence business immediately.
Application for Licence or Approvals
Companies with restricted business activities such as securities dealing, printing press, travel agency, banking, insurance, employment agency, etc. may need to apply for additional license(s) or approval(s) from the relevant Government authorities before the companies are allowed to be operative.