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Setting Up in Singapore

Essential information you need to know to set up a business in Singapore.
Relevant to:
Local CompaniesForeign CompaniesLimited Liability PartnershipsLimited PartnershipsPartnershipsSole-proprietorshipsStart-ups
Stage:
Before Starting Up

Types of Business Structures

A video to explain the different types of business entities available when registering a business.

The following business structures are available for registration: 

  • Sole Proprietorship
  • Partnership
  • Company
  • Limited Liability Partnership
  • Limited Partnership

You may wish to refer to the table summary of the differences between the various entity types.

Who can Register?
  • Individuals and companies may set up and own a sole-proprietorship or partnership.
  • A sole-proprietorship or partnership, not being a separate legal entity, cannot register another sole-proprietorship or partnership.
  • A foreign company also cannot register a sole-proprietorship or partnership unless it has registered itself under the Companies Act, Cap. 50.

Sole Proprietorship

A sole-proprietorship is a business owned by one person or one company. There are no partners. The sole-proprietor has absolute say in the running of the business.

Partnership

A partnership is a business firm formed by two to twenty partners. Once there are more than twenty partners, the partnership must be registered as a company under the Companies Act, Cap. 50.  

Company

A company is a business entity registered under the Companies Act, Chapter 50. It has a legal personality i.e. it has rights to own properties, has perpetual succession and  can sue or be sued in its own name. It usually has the words 'Pte Ltd' or 'Ltd' as part of its name.

Limited Liability Partnership

A Limited Liability Partnership (LLP) is a vehicle for doing business in Singapore. An LLP gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company.

This means that the LLP is seen as a body corporate and has a legal personality separate from its partners. The LLP has perpetual succession, which means any change in the partners of an LLP will not affect its existence, rights or liabilities.

The partners of the LLP will not be held personally liable for any business debts incurred by the LLP. A partner may, however, be held personally liable for claims from losses resulting from his own wrongful act or omission, but will not be held personally liable for such wrongful acts or omissions of any other partner of the LLP.

An LLP is required to keep accounting records, profit and loss accounts and balance sheets that will sufficiently explain the transactions and financial position of the LLP. In the event the LLP does not do this, the LLP and every partner shall be prosecuted and the penalty may be a fine or imprisonment, or both. In addition, the LLP shall submit to the Registrar an annual declaration of solvency or insolvency (i.e. being able or unable to pay its debts respectively) which will be made available to the public.

Limited Partnership

A Limited Partnership (LP) is a vehicle for doing business in Singapore. It is a partnership consisting of a minimum of two partners, with at least one general partner and at least one limited partner. An LP does not have a separate legal entity from the partners.

An individual or a corporation may be a general partner or a limited partner of the LP. Appointing a local manager is not mandatory unless all the general partners are residing outside Singapore.

A general partner is responsible for the actions of the LP and is liable for all debts and obligations of the LP. A limited partner is not liable for debts and obligations of the LP beyond his agreed contribution, provided he does not take part in the management of the LP.

If there is no limited partner registered with ACRA, the LP registration will be suspended and the general partner will be deemed registered under the Business Names Registration Act. Once a new limited partner registers with ACRA, the LP registration will be restored and the registration under the Business Names Registration Act will cease.

During the registration of the LP, the lodger is required to indicate if the proposed LP falls under Regulation 12 of the LP Regulations. He is also required to indicate the name of the licensed fund manager in the application.

Regulation 12 of the Limited Partnership (LP) Regulations applies where:

  • An LP primarily establishes a fund for investment, and
  • A "licensed fund manager" (whether a general partner or a general partner's appointee) manages the fund.

A "licensed fund manager" is licensed under the Securities and Futures Act (Cap. 289) to carry on fund management business. He can also be exempted from being so licensed under Section 99 of that Act.

Copyright © 2017 Accounting and Corporate Regulatory Authority.All Rights Reserved.
Last Updated/ reviewed On 20 Jan 2015