Choosing the ‘right’ type of entity is one of the prerequisites before starting your business in Singapore. Your initial decision may affect the image branding of your business among to the stakeholders (i.e. suppliers, clients, customers, general public), the extent of liability you’ll face, ability to take loans which affects the possibility of your business expansion and so on.
The following summarize the types of business entities in Singapore:
WHAT IS IT?
A Limited Liability Company (LLC) is a company limited by shares, registered under the Singapore Companies Act. It has a separate legal entity from its members which means that the liabilities of the owners are limited to the assets in the Company (e.g. the amount of investment you’ve made into the Company). Personal assets of the owners are protected.
For Foreign Companies, there are three entity options to set up its presence:
Kindly refer here for further details
WHAT IS IT?
This type is suitable for two or more people (max. 20) to establish a business. It is not a separate legal entity and its partners have unlimited liability. Partners are personally liable for partnership’s debts and losses incurred by other partners. Partnerships can sue and be sued in its own name but cannot own property in its own name.
Moreover, partnership may cease to an end with death, retirement, incapacity or insolvency of a partner. Any unsatisfied partner can also cease the partnership with given notice any time.
WHAT IS IT?
A sole proprietorship is not a separately incorporated entity, which concludes that the liabilities of the owner extend to his/her business liability. This is the riskiest type of business since there is no segregation of liability, and this may be one of the biggest disadvantage that entrepreneurs are unaware of. This is suitable for business with no or negligible risk. For more information on sole proprietorship registration, kindly drop us an enquiry here.