Are you finding proper information on company Formation in Singapore? This guide contains all data on what terms you must be aware of while incorporating a company in Singapore.
The Requirements for Company Formation in Singapore
Singapore is one of the best nations for conducting business operations, so establishing an organisation in Singapore is smart. A business in Singapore is formed according to the rules and regulations enacted by Singapore Companies Act. This guide will teach you about the prerequisites and procedures for company Formation in Singapore.
Once you satisfy the following points, you can opt for company incorporation in Singapore.
1. Name of the Company
Before starting your company in Singapore, you will need an identity for your business and get approval to use the company’s name.
2. Directors
There must be at least one director who lives in Singapore and has a proper residence. Also, this person could be a citizen or permanent resident or with a valid work permit. There is no limit to the number of directors, whether foreign or local, companies can appoint in Singapore.
But, certain basic qualifications must fulfil the law’s rules and regulations. For example, Directors must be 18 or older and should not be a person with a criminal history. Also, the person should not have had bankruptcy issues. Directors do not have to be shareholders.
3. Shareholders
If you are in Company Formation in Singapore as a private limited business, you can count anywhere from 1 to 50 shareholders. They can be entities or individuals, local or international. The shares may be granted or transferred to shareholders when the company is formed.
The company’s classification takes part as an exempt private company if the private entity contains at least 20 shareholders. In these corporations, any corporation doesn’t own the beneficial interest (directly or indirectly). 100% foreign ownership is permissible.
4. Capital Paid Up
In order to register a business in Singapore, the minimum capital requirement is S$1. However, it will be higher any time after you complete your company registration.
5. Registered Address
A local Singapore address is necessary as it will work as the company’s office address once you complete the registration. The address could be commercial or residential but must not be a post office.
If we talk about the Home Office Scheme in Singapore, one can choose to use their residential address as a business address. This also applies to the HDBs (Housing and Development Board) and private residences.
6. Documents
These are the necessary documents for Shareholders with Individual Shares:
- Passport
- Resident ID card for Singapore residents
- Address evidence
- A detailed professional background
If you’re a corporate shareholder, you will need to have to meet the following requirements to be able to incorporate an account in Singapore successfully:
- ACRA Registration Certificate
- Details of the company, including the name of the registration number, company name, and address
- Authorisation documents to hold shares of the company and appointment certificate of an authorised person
- The document describing the ultimate beneficiaries, along with KYC due diligence
What are the Pre Incorporation Criteria For ACRA Registration?
If you plan Company Incorporation in Singapore, you should know the Pre incorporation criteria for ACRA registration. It will help you make a strong base when starting your business in Singapore. Here are some of the most important requirements you need to meet to obtain the registration of your company.
Make sure your company’s name is unique and indicates the type of business. The company must have a local director who is either a Singapore Citizen or a Permanent Resident. You can appoint an employee who holds a valid Employment Pass or EntrePass.
You should prepare your company constitution before applying for ACRA registration. Formerly known as Memorandum and Articles of Association, the constitution is a legal document that establishes the structure, governance, and management rules of your business.
A lawyer generally reviews it during the incorporation process. You can download a model constitution online. Once you complete the documents, you should submit them to the ACRA for registration. There are many benefits of Company Formation in Singapore. First, you have limited liability.
As a company is a legal entity separate from its owners, you cannot be held personally responsible for the company’s debts or be sued personally by its creditors. Also, you have more compliance requirements, including annual general meetings and filing annual returns. Non-compliance with these requirements can result in disciplinary action from ACRA.
Registered Office and Share Capital in Singapore
A Singapore company’s registered office and capital are two important aspects of the country’s laws. In Singapore, a company must have at least a S$1 paid-up capital. The issued capital represents the total number of shares multiplied by their nominal value.
A private company may also have unpaid capital. Private companies can issue shares to their founders, but they cannot use those shares as guarantees. In Singapore, a company’s share capital consists of the money that shareholders invest. You can divide a company’s share capital into paid-up and unpaid capital.
Companies may also issue shares without full payment. Companies must obtain members’ approval in Singapore before reducing their paid-up capital. The procedure for reducing capital also involves passing a special resolution. It is important to remember that the members can object to any capital reduction and may sue the company.
There are minimum requirements for shareholders and company formation in singapore. Also, the companies must have at least one shareholder, who must be a resident of Singapore. Directors and members of private limited companies can be foreign or local. Non-residents must be at least 18 years old and free from malpractice charges.
Conclusion
Incorporating in Singapore may sound like a daunting task to the new entrepreneur, but it isn’t nearly as difficult as it may seem. While some tasks are easier to handle, the legal nature of incorporation requires that you enlist the help of a professional.
You already went through the basic requirements you’ll need to meet. Now, incorporating a company in Singapore or pre-planning it won’t be an issue for you.
