Incorporation of Company in Singapore

Among the different business structures allowed to incorporate in Singapore, the limited liability company is deemed the most popular. Stipulated on the Companies Act, a limited company may be limited by guarantee or shares. It is registered as a private should it compose of not more than 50 shareholders and if in its Articles of Associations, the right to transfer of share is restricted. Lest, it is registered as a public company.A company is clothed with legal personality. Hence, in its name, the company can sue and be sued, can possess and dispose assets, and can incur debts and losses. Its shareholders are liable as far as for any amount unpaid on their shares. Nonetheless, when the shares are paid wholly, its shareholders are not responsible for any debts of the company.

A Singaporean private limited company established to provide professional services such as incorporating a company, it is understood that the first procedure of incorporating a company is to register for approval of business name with ACRA.

As soon as the business name is approved, the incorporation information is filed online with ACRA. Unless the notification of incorporation is received through an e-mail from ACRA, the company should refrain from engaging in any business operation. Included in the said e-notification is a statement from ACRA informing its shareholders and directors that they can commence with their business activities. Asiabizservices says that effective May 2003, a company can incorporate even with a minimum of 1 director who is a natural person of legal age and capacity.

"If the company has 1 director only, that person must be ordinarily resident in Singapore," the business consultant emphasized, referring to Singaporean citizenship, permanent residence or an individual who holds an Employment Pass and is residing in a Singapore address.

Nevertheless, a company having more than one director is not required that all directors should maintain an ordinary residence in Singapore. Similarly, in a private company, there exists at least 1 shareholder who is either a natural person or a distinct corporate entity or business firm.

In addition, a company secretary ought to be appointed within 6 months after its incorporation and who shall be a natural person with Singapore as the secretary's only principal residence.

As part of the company's annual requirements,  an auditor appointed by the company within 3 months following its incorporation is obliged to report to its members on the accounts of the company, unless the company has been dormant or registered as a small exempt private company or EPC.

However, although small EPCs and dormant companies-which  refers to any company maintaining no accounting transactions-are exempted from statutory auditing requirements, they are expected to prepare their financial statements patterned after the Financial Reporting Standards.