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Things to Take Note When Setting Up A Company in Singapore
Setting up a business probably takes a lot of consideration; it is a serious undertaking after all. But in Singapore, the act of officially registering a company is a relatively straightforward task. If all the necessary documents are prepared properly, the process itself takes no time at all. Here, we go through the steps to take in setting up a company in Singapore, and the things to take note of at each phase. What is a company? In Singapore, the Accounting & Corporate Regulatory Authority (ACRA) allows for the registration of various types of business entities, such a sole-proprietorship or a limited liability partnership. However, the most common entity is the private limited company. A company is a legal entity formed for the purposes of engaging in, and operating, a business. A private company is one that is not publicly listed on the stock exchange and thus all its equity is held under private ownership. A private limited company is one that has limited liability. This means that the company is a separate and distinct entity from the owners, who are thus not personally liable for the company’s liabilities, such as debt. This also means the company is a taxable entity in its own right. In exchange, companies have more compliance requirements to fulfil compared to sole-proprietorships and partnerships. The process of terminating a company, should things not work out, is also more complicated. Under the Singapore Companies Act, a person (foreign or local) needs to be above the age of 18 to register a company. What are the minimum requirements? The requirements for a private limited company to be formed are as follows:
- An approved company name (see below)
- At least one shareholder, up to a maximum of 50
- At least one resident director, who must be a Singapore citizen, a Singapore Permanent Resident, or a person who has been issued an EntrePass, Tech.Pass, Employment Pass or Dependant’s Pass. Any number of additional resident or non-resident directors can be appointed as well, as long as they are older than 18 years old and are not disqualified from being a director (for example, if they are bankrupt).
- One company secretary, who must be a local resident as well, and must be appointed within six months of the company’s incorporation. If the company only has one director, he cannot also serve as the company’s secretary.
- Initial paid-up share capital of at least S$1
- A physical Singapore office address. The registered address can be either a residential or commercial address, but not a P.O. Box.
Get approval from ACRA for company name
This is the first step to registering a new company. There should be no problem in getting a quick approval from ACRA as long as the registered name is free of any copyright issue and does not contain any vulgar or obscene words.
Approval can be gotten by applying through BizFile+, a web portal maintained by ACRA.
Once approved, the company name will be reserved for 60 days (and can be extended for another 60 days after if need be) from the date of application, giving you ample time to proceed with the incorporation of your company.
Prepare the necessary documents
The next step is to provide the following documents:
- Approved company name
- Brief description of business activities
- Shareholders’ particulars
- Directors’ particulars
- Registered address
- Company secretary’s particulars
- Company constitution
Of these, the last one would probably take the most work to prepare. A company’s constitution sets out the organisational framework of the company. It typically consists of the company’s Memorandum of Association and Articles of Association. The former sets out what activities the company may engage in, while the latter governs the internal relationships between and among its members.
If necessary, corporate secretarial services can be engaged to draft and customise your company constitution.
Submit application to ACRA
Once the documents are ready, you can head back to BizFile+ to apply for the company registration. The registration fee is S$315. Assuming the documents are in order, your company can be set up within minutes.
Should the authorities feel your application needs to be reviewed, additional information may be requested from you. Even then, the application process is not expected to take longer than a few weeks at most.
When your Singapore company has been successfully registered, you will receive an official email notification from ACRA enclosing your company’s official company registration number. This email is very important because it is considered to be the official certificate of incorporation for your company.
Hard copies of the certificate of incorporation are no longer given out by default, and they will cost $50 per copy if you make an online request to ACRA for one.
Your company business profile should also now be available for download after paying a fee of S$16.50 to ACRA.
These two documents are all you need for your company to begin engaging in business and contractual activities, such as opening a corporate bank account or signing an office lease.
And that’s it, you are now the proud owner of a Singapore company!
Some post-registration concerns
There are still a few more items that a company will almost certainly need after being successfully registered as one. This includes:
- Share certificates for each of the shareholders
- Share register indicating shares allotted to each of the shareholders
- A shareholders’ agreement
- A rubber stamp for the company (not necessary but good to have as a convenience)
Startup SG was launched in 2017 as a platform for entrepreneurs to access local support schemes. Their programmes include Startup SG Founder, which provides first-time entrepreneurs with mentorship and a startup capital grant. This grant matches S$3 to every S$1 that the entrepreneur raises, up to S$30,000.
Depending on the nature of your business operations, you may also need to obtain a business license. Examples of businesses that require a license includes F&B establishments, educational institutes, and financial services companies. More information can be found here.
A company common seal is an official seal that is used by the company to emboss documents, usually legally binding ones like deeds and contracts, as a form of endorsement. As such, a company seal was of great importance to a company’s operations. However, since 2017, the Companies Act has been amended such that a company seal is not required. Documents can be executed instead by signature from at least two directors of the company, one director and the company secretary, or one director in the presence of a witness.
Every company must also hold an annual general meeting (AGM) every calendar year, with its financial statements tabled at the AGM for the shareholders’ approval. Subsequently, within one month of the AGM, the company must then file its annual returns, and then prepare to file corporate income tax based on those annual returns. The last dates of tax filing for companies are 30 November (paper-filing) and 15 December (e-filing) of each year.
And finally, if the projected annual revenue of your company exceeds S$1 million, you must register it for GST. You are then obligated to charge this tax on your customers for goods and services provided and remit it timely to the tax authorities. You may refer to the IRAS website for more information on GST.
Grants that can help newly incorporated companies
Even without the ongoing Covid-19 pandemic, the Singapore government has always provided support schemes for SMEs and new businesses. Here are a few that your new business might be able to tap on.
1) Startup SG
For tech startups, the Startup SG Tech allows for either a Proof-of-Concept (POC) grant of up to $250,000 or a Proof-of-Value (POV) grant of up to $500,000, depending on the stage of development of their technology or concept.
2) Enterprise Development Grant (EDG)
The Enterprise Development Grant helps to offset qualifying costs for projects that help businesses grow and transform through adoption of technology and innovative processes.
Companies looking at upgrading their businesses, or exploring new areas of growth by tapping on automation and technologies can receive higher support of up to 80% until 30th September 2021, after which it will revert to up to 70%.
3) Productivity Solutions Grant (PSG)
The Productivity Solutions Grant supports companies in the adoption of pre-scoped IT solutions and equipment that enhances productivity and business processes.
It covers sector-specific solutions including the retail, food, logistics, precision engineering, construction and landscaping industries. Other than sector-specific solutions, PSG also supports adoption of solutions that cut across industries, such as in areas of customer management, data analytics, financial management and inventory tracking.
The higher support of up to 80% will be extended till 30 September 2021, and revert to up to 70% thereafter.
In partnership with Infocomm Media Development Authority, the grant also includes laptop-bundled remote working solutions for eligible companies from 17 April 2020 till 31 December 2020.
4) P-Max Hiring Grant
P-Max is a Place-and-Train Programme that aims to help small and medium-sized enterprises (SMEs) to better recruit, train, manage and retain their newly-hired PMETs, through encouraging the adoption of progressive human resource practices within SMEs. This programme is administered by the Workforce Advancement Federation (WAF), which is appointed by Workforce Singapore (WSG).
If your company has recently hired a PMET (within the last 3 months), and successfully retains the PMET for at least 6 months after attending the programme, you will be eligible for a one-time Assistance Grant of S$5,000 for hiring Singaporeans and PRs. The grant has also been enhanced - P-Max for Older Worker - to allow eligible SMEs to claim up to S$10,000 for hiring Singaporeans aged 50 and above.
Read also: P-Max Grant: Claim Up to S$10,000 For SMEs to Hire/ Retain New Local PMETs - **EXTENDED** FOR 2020
Read also: Best PSG-Approved Business Laptop Comparison 2020
Read also: COVID-19: Productivity Solutions Grant (PSG) For Companies Embracing IT Solutions in 2020
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