Why use Pte.Ltd to start your business in Singapore?

Starting a business in Singapore opens up a world of opportunities, and choosing the right business structure is a critical decision. One of the popular choices is a Private Limited Company, commonly known as Pte. Ltd. This business structure offers a range of advantages that make it a preferred option for entrepreneurs. Let’s look into why you should consider Pte. Ltd. when setting up your business in the Singapore.

What is Private Limited Company (Pte.Ltd)?

A frequently chosen business entity in Singapore is the private limited company, commonly referred to as commonly known as a Private Limited (Pte Ltd) company in Singapore. This business structure is mostly used by entrepreneurs aiming to establish a company in Singapore. A private limited company is a legal business structure that offers limited liability to its shareholders. Governed by the Singapore Companies Act, Chapter 50, the registration process for a private limited company adheres to the regulations set by the Accounting and Corporate Regulatory Authority (ACRA), the official Company Registrar of Singapore. Pte Ltd in Singapore is recognised for its dynamic, credible, and scalable characteristics, making it an ideal choice for businesses with growth aspirations.

Role of the Accounting and Corporate Regulatory Authority (ACRA)

  1. Company Registration and Compliance:
    - Incorporation: ACRA is responsible for the registration of new companies in Singapore, including Pte Ltd entities. This involves approving company names and issuing certificates of incorporation.

    - Compliance: ACRA sets and enforces compliance standards for companies. Pte Ltd companies must adhere to regulatory requirements, such as filing annual returns and financial statements.

  2. Maintaining the Public Register:
    ACRA maintains a comprehensive public register of companies in Singapore. This register includes essential information about each registered company, ensuring transparency and accessibility of business information.

  3. Regulatory Oversight:
    ACRA acts as the regulatory body overseeing corporate practices in Singapore. It ensures that companies operate within the legal framework and comply with the Singapore Companies Act.

  4.  Corporate Governance:
    ACRA promotes good corporate governance practices. It provides guidelines and standards for directors and officers of companies, fostering ethical business conduct.

Key Characteristic of Private Limited Company (Pte.Ltd)

  • Limited Liability: Shareholders' liability is limited to the amount unpaid on their shares. Personal assets are generally protected from the company's liabilities.
  • Separate Legal Entity: A Pte Ltd is considered a distinct legal entity from its shareholders. It can own assets, enter into contracts, and sue or be sued in its own name.
  • Shareholders: A private limited company can have a minimum of one and a maximum of 50 shareholders. Shareholders can be individuals or corporate entities.
  • Directors: There must be at least one director who is ordinarily resident in Singapore. Directors make decisions on behalf of the company.
  • Company Secretary: Every private limited company is required to appoint a qualified company secretary within six months of its incorporation.
  • Annual General Meeting (AGM): Private limited companies are required to hold an AGM once a year, during which financial statements are presented to shareholders.
  • Audit Requirements: Exempt private companies with annual revenue of less than SGD 10 million are exempt from statutory audit requirements. However, they are still required to maintain proper accounting records.
  • Singapore Companies Act: Private limited companies in Singapore are governed by the Singapore Companies Act.
This business structure is popular among entrepreneurs due to its benefits such as limited liability, credibility, and ease of scalability.

Advantage of running as Private Limited Company (Pte.Ltd)

  1. Limited Liability Protection
    One of the foremost advantages of incorporating as a Pte. Ltd. is the concept of limited liability. This means that the personal assets of shareholders are separate from the company's liabilities. In the event of unforeseen circumstances or legal issues, the personal wealth of shareholders is safeguarded, providing a crucial layer of protection.

  2.  Credibility and Professionalism
    The 'Pte. Ltd.' designation carries weight in the business world. It communicates professionalism, stability, and a commitment to governance standards. Clients, partners, and investors often view Pte. Ltd. companies as more trustworthy, laying a strong foundation for building relationships and securing opportunities.

  3. Access to Capital
    For businesses looking to attract investors or secure loans, being a Pte. Ltd. can open doors. The clear legal structure and limited liability nature make Pte. Ltd. companies more appealing to investors who seek stability and a reduced level of risk.

  4. Tax Advantages
    Singapore's taxation system is renowned for its friendliness to businesses, and Pte. Ltd. companies enjoy several tax benefits. From partial tax exemptions to the attractive corporate tax rates, these incentives contribute to a favorable financial environment for business growth and profitability.

  5. Transferability of Ownership
    Flexibility is key in business, and Pte. Ltd. companies offer just that. Shares can be easily transferred, allowing for changes in ownership without disrupting the business operations. This feature is particularly valuable for succession planning or attracting new partners.

  6. Limited Liability for Shareholders
    Shareholders in a Pte. Ltd. have limited liability, meaning their personal assets are protected. This not only attracts investors but also encourages individuals to take on roles as shareholders without the fear of extensive personal financial risks.

  7. Global Recognition
    Establishing a Pte. Ltd. in Singapore provides a stamp of credibility on the global stage. The city-state is known for its business-friendly policies and global connectivity, making it an ideal base for companies with aspirations for international expansion and collaboration.

In conclusion, opting for a Pte. Ltd. structure for your business in Singapore is a strategic move that aligns with the city-state's commitment to fostering a conducive business environment. It combines legal protection, tax benefits, and operational flexibility, making it an ideal choice for entrepreneurs who aspire to develop in the vibrant Singaporean business landscape.

Steps for Company Registration a Private Limited Company (Pte Ltd) in Singapore

Step 1: Name Reservation
  • Choose a Unique Name: Your company's name is its identity. Ensure it's distinctive, not already in use, and adheres to naming guidelines.
  • Submit Name Application: Begin by filing a name application with the Accounting and Corporate Regulatory Authority (ACRA).
  • Approval and Reservation: Upon approval, your chosen name is reserved for 60 days.

Step 2: Company Incorporation

  • Prepare Documents: Gather essential documents, including the Company Constitution, particulars of shareholders, directors, and the company secretary, and the registered office address
  • Appoint a Company Secretary: Every Pte Ltd must have a qualified company secretary who is a resident of Singapore.
  • Share Capital: Decide on the number of shares and their value.
  • File Incorporation Documents: Submit the necessary documents to ACRA.
  • Certificate of Incorporation: Once approved, ACRA issues the Certificate of Incorporation, marking the birth of your company.

Step 3: Post-Incorporation 

  • Open a Corporate Bank Account: Choose a bank that aligns with your business needs and open a corporate bank account.
  • Register for Taxes: Obtain a Unique Entity Number (UEN) and register for Goods and Services Tax (GST) if applicable.
  • Employment Pass (if needed): For foreign entrepreneurs relocating to Singapore.
  • Required Documents:
    -For Shareholders and Directors:
    Copy of NRIC or Passport.
    Proof of foreign address (for non-residents).

    -For Company Secretary:
    Consent to Act as Secretary.
    Relevant qualifications.

    -For Registered Office:
    Tenancy agreement or utility bill.

Registering a Pte Ltd in Singapore is a meticulous process that demands attention to detail. Seeking professional guidance such as company secretary and appointed company incorporation such as Altomate to ensures a smoother journey through the complexities for your business. 

To subscribe accounting, bookkeeping, taxation service from Altomate, contact support@altomate.io