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Choosing Business Structure for a Singapore Company

Apr 18, 2017

Singapore is an offshore jurisdiction that attracts entrepreneurs since the 2000’s. At present, there is a wide choice of corporate structures if you want to form a business in Singapore. Understanding which one is the best for you can mean a lot. We listed the most popular and suitable for business legal forms below to make the choice easier.

Limited liability company

A Limited liability company or LLC usually operates like a separate legal entity. You should know that LLC usually is not limited by shares. There are three types of LLCs in Singapore: Private Limited Company, Public limited Company and Public Company Limited by Guarantee.

• Private Limited Company (Pte. Ltd.): This type of LLC is the most common for a lot of business organizations in Singapore. The shareholders are not burdened by the responsibility for company’s debt which exceeds the contributed share capital. The company’s shares may be distributed among 50 people, usually the number of shareholders is considerably lower. Pte. Ltd. is easy to manage, due to the fact that its shares are often owned by a corporation or an individual and are not available to the general public.

• Public Limited Company: This type of LLC is more suitable for large business being that company’s shares are usual available to the general public and the number of shareholders is at a minimum of 50 people. Given that these types of companies involve the general public, there are more rules and regulations that prevent operation and the misuse of public funds.

• Public Company Limited by Guarantee: Contrary to a Public Limited Company and a Private Limited Company, this type of company is set up for non-profitable purposes. It is a public company formed based on the principle of limiting the liability to the amount that members contribute to the assets of the company. This formation is common with non-profit organizations.


Sole Proprietorship

A sole proprietorship is the easiest way to start your business in Singapore due to the simplicity of this type. A sole proprietorship is a business owned by one person. The owner of the business is also called a sole proprietor. Contrary to Limited Liability Companies, the owner of the company is seen as integral part of the company, therefore, they are more exposed to the risks associated with business. Personal assets and assets of the company are directly under the name of the owner, so legally they are not protected.


A Partnership is a fairly common type of activity in Singapore. Actually, a partnership company does not exist legally on its own without its partners. Membership ends upon death, retirement or insolvency. There are three types of partnership structures in Singapore: general partnership, limited partnership and limited liability partnership.

• General partnership: In case you have one or more partners you want to work with, it is rational to form a partnership. In other words, this corporate structure is analogue to a sole proprietor. Legal entity in form of a partnership presumes you have collective assets and carry on the liability together with partners. Taxation depends on your personal profits, which is positive, but liability depends only on company’s debts and partners are responsible for it with all their assets, which is risky.

• Limited Partnership: this is the most common type of partnership structure among companies. This legal entity has features of partnership but is more secure for limited partners. The main point is that a general partner (at least one person) is personally liable for entity’s debts in full. On the contrary, a limited partner (at least one person) is not liable beyond the amount of his contribution into the company’s assets. Limited partnership is a good choice for businessmen who are ready to personally control every move and operation of their company. In Singapore, limited partnerships are obliged to have at least one general partner residing in Singapore or a resident manager appointed by partners to be in control.

• Limited Liability Partnership: LLP consists of at least two (maximum 20) limited partners that are liable only for the amount of their contribution and their own actions. This type of company is a separate legal entity not connected to any of its partner. Having separate property, being a party in a court, contractor, being liable for debts: all these actions are valid for a limited liability partnership (LLP). LLP in Singapore is obliged to have at least one residing manager.

Choose the most suitable legal form thoroughly and before starting a new legal entity choose a professional lawyer, financial services in Singapore, tax consultant and analyze other possibilities for your business. Singapore is a good jurisdiction to choose, but it is important to thinking through all of the possibilities.

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