Forms of Business

• limited liability company;
• partnership;
• sole proprietorship; and
• joint venture.

A public company can have more than 50 members, and at least 5% of the nominal amount of the shares on every public offer must be paid up.

Companies are incorporated under the Companies Act, as amended, and regulated by the Companies Regulations, as amended. Depending on the nature of the liability of their members, companies can be divided into companies limited by shares, companies limited by guarantee and unlimited companies.

The liability of the shareholders in a company limited by shares is limited to the extent of the nominal value of their shares. Companies limited by shares may be classified as follows:

• private company (Private Limited/Pte. Ltd.), i.e. a company which is restricted in the right to transfer its shares, has 50 members or less, and is prohibited from issuing any invitation to the public to subscribe to its shares or debentures, or to deposit money with the company;
• exempt private company, i.e. a private company with 20 members or less, and no beneficial interest in its shares is held directly or indirectly by a company; and
• public company (Limited/Ltd.), i.e. a company to which the restrictions applicable to private companies do not apply.

Subject to all relevant information being available, a company can be incorporated immediately upon submission via electronic filing with ACRA.

A company must have at least one member. There is no minimum capital requirement for a private company, although a minimum of two shares must be subscribed.

With effect from 1 April 2004, a company may have only one director who must be “ordinarily resident in Singapore” i.e. a Singapore citizen, a Singapore Permanent Resident, or a person who has been issued an Employment Pass/Approval-In-Principle letter or a Dependant Pass.

The Partnership Act 1890 of the United Kingdom applies. Sections 4(1)(a) and 5 of the Singapore Civil Law Act, as amended, provide for the application of the entire UK Act.

A partnership is not regarded as a separate legal entity, and the liability of each partner is unlimited. There are no capital requirements. The minimum number of partners is 2 and the maximum is 20.

Partnerships must be registered with the Registrar of Business (ROB) under the provisions of the Business Registration Act. Societies duly registered under the Co-operative Societies Act, or registered or exempted under the Societies Act, need not be registered. Professional partnerships need not be registered if the professional partners are registered otherwise than under the Business Registration Act.

The Limited Liability Partnership Act came into effect on 11 April 2005. A limited liability partnership (LLP) is regarded as a “body corporate” and has a legal personality separate from its partners (however, for tax purposes an LLP is treated as a transparent partnership). There are no capital requirements. The minimum number of partners is two with no maximum limit.

An LLP gives its owners the flexibility of operating as a partner while giving them limited liability, combining the benefits of a partnership with those of private limited companies. However, this comes with safeguards in law to minimize abuse and provide protection to parties who deal with LLPs.

The Limited Partnership (LP) Act came into effect on 4 May 2009. An LP is a business structure that allows a business to operate and function as a partnership without a separate legal personality from the partners. It must consist of one or more general partners who have unlimited liability and one or more limited partners who enjoy limited liability. A partnership is deemed to be a general partnership unless one or more partners of the partnership are registered as limited partners under the LP Act. LPs are generally taxed in the same way as LLPs, with a few modifications.

None.

Holding company

Holding companies in Singapore are usually set up as private limited companies, and the incorporation process is the same as for other companies.

Foreign companies can opt to register branch offices, representative offices and subsidiaries in Singapore.

A foreign company means any company or body corporate incorporated outside India that has a place of business in India whether by itself or through an agent, physically or through electronic mode, and conducts any business activity in India in any other manner.

Two types of joint ventures are commonly found in Singapore:

• contractual joint ventures, which are treated as partnerships for tax purposes; and
• equity joint ventures, which are incorporated and taxed as businesses.

There are no special provisions.

A sole proprietorship carrying on a business must be registered under the Business Registration Act. Professional businesses need not be registered if the name of the professional is otherwise registered (e.g. under the Legal Profession Act, Accountants Act or Architects Act).

On 1 October 2018, the Variable Capital Companies Act (VCC Act) was passed by Parliament. The VCC Act is expected to be gazetted and become effective in 2019. A variable capital company is a company regulated by the VCC Act (i.e. not the Companies Act) that is allowed to have multiple sub funds that may have different shareholders and different investments, and the assets of each sub-fund are legally protected from claims against another sub-fund of the same variable capital company.