Private Limited Company
A company is a business entity registered under the Singapore Companies Act
, Chapter 50. As an entity, the company has rights to own properties, has perpetual
succession and can sue or be sued. Among the different types of business structure, a
private limited company is one of the most popular in Singapore.
One of the key characteristics of a private limited company is that it has a separate legal
entity from its owners, shareholders, and directors. This allows the company the legal
capacity to enter into agreements and contracts, assume obligations, incur and pay debts,
sue and be sued in its own right, and be held responsible for its actions and debts incurred
by the business.
For more information, please visit our Singapore Statutory Compliance
Requirements page and Incorporation Details
Once the company is incorporated, annual filings to ACRA and IRAS is required. Please visit
our Annual Filings
page for more information.
Pros and Cons of a Private Limited Company
- Shareholders are not liable for the company's debts beyond the
amount of capital they have put into the company.
- It is easy to transfer ownership through the selling of shares
or issuing of new shares to new investors.
- It has perpetual succession, which means there is no need to
wind up the company in the event of deaths, or changes in
shareholders or directors.
- It is easier to obtain funding from investors or loans from
- It has higher credibility and status in the minds of customers
- It is entitled to attractive tax benefits and incentives. For
example, the corporate tax rate for a private limited company
with profits up to SGD 300,000 is below 9% and capped at 17% for
profits above SGD 300,000. There is also no capital gains tax.
- There are tighter rules and regulations compared to sole
proprietorship and partnerships.
- There are more detailed disclosure and administrative
requirements, such as filing of annual returns and appointment
of a Company Secretary, compared to sole proprietorship and
partnerships, which translates to higher operating cost.
- Directors must disclose to the company certain information about
their interests in the company’s shares, contracts and
VOPlus can advise you on the most suitable type of business entity for your business
and help you convert a private limited company in Singapore promptly.
Contact us today for a consultation!
You may also be interested in: