In the previous post, we have gone through the officers required to form a private shares limited company in Singapore.
Here is summary:
- The Singapore’s ACRA requires every private share limited company to have at least one director, who is either a Singaporean Citizen or a Permanent Resident, and to appoint an independent auditor within three months after the incorporation.
- The government has implemented an extra relief to allow eligible “small companies” to be exempted from the responsibility of annual audited accounts for at least two consecutive financial years.
Then, we will cover the procedure of incorporation in this post.
Name Checking and Business Activities Checking on BizFile+
BizFile+ is a web portal under the administration of ACRA to offer online service for automation of the registration and maintenance of Singapore business entities to the public of Singapore.
Although the incorporation and management services on BizFile+ are only available to registered individuals of Singapore Citizen or PR and registered Filing Agents in Singapore, non-registered users can still access to the registry of business entities online. Everyone can search for their proposed company names on BizFile+ and get instant feedback, to see if the proposed name is unique in the registry.
However, existing businesses may file complaints against your application if your proposed company resembles theirs and confuse their customers. So, you should avoid picking names with similar pronunciations to the existing one or names in different orders of words. Moreover, the ACAR will reject the names if it is offensive to others or public interests.
Then, you need to identify the primary business activities by selecting at least one but not more than two Singapore Standard Industrial Classification (SSIC) codes, which can describe your primary business activity. More details of SSIC is here.
You have to provide the personal identification details, contact information (telephone number and e-mail address) of directors, shareholders, and company secretary when submitting the incorporation application, so get them ready now.
Company Name Reserve
Unlike Hong Kong company formation procedure, you must complete the Company Name Reserve on BizFile+ to let ACRA and other related parties review your proposed name, you will be approved within 15 minutes but may up to 2 weeks if others are concerned about this name. Without the permission of Name Reserve, you cannot proceed to the incorporation procedure on BizFile+, and the reservation is valid for the next 120 days.
The regulation of shareholding of private company in Singapore is the same to that of Hong Kong limited company.
In Singapore, every company must have at least one shareholder but not more than 50. The shareholders can be individuals or corporates. The amount of issued capital, which is the total amount that shareholders have paid for their shares, has to be indicated on the company’s incorporation form. The minimum issued capital must be at least $1 in any currency. However, there is no minimum paid up capital required.
Various types of shares with different conditions are allowed. Generally, a company issues two main types of shares:
- Ordinary shares: Carry voting rights and entitle shareholders to variable rates of dividends (i.e. payments to shareholders from profits of the company)
- Preference shares: Has preferential rights over ordinary shares, usually in respect of dividend distributions. The specific rights and benefits of preferential shares are commercial decisions decided by each company. However, they must be contained in the Constitution or resolutions passed during meetings.
The constitution states the laws of your company. It is a legal document that serves four purposes:
- Describes the key characteristics of the company.
- Contains the rules and regulations for its governance.
- Describes how its operations will be carried out.
- States the rights and responsibilities of the directors, shareholders and company secretary.
You need to submit a copy of your company’s constitution on the application of incorporation.
The ACRA has published the sample constitution for your to adopt. Download it here.
Registered Office Address
Every company must provide a registered office address for the ACRA as an the address of a company’s registered office. This address must refer to a place where is accessible to the public and opperational during normal office hours.
The government can send all official communications and notices to the registered office. And the company should store its register and records in the registered office.
The company need not conduct its business in its registered office. Therefore, the company can hire a Filing Agent to share the address as its registered office address and take care of the duties mentioned above.
We will talk about about handling the maintenance and tax return filing in the upcoming posts.