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Essential Guidelines About Company Formation

by Lisa Savage

Singapore is a popular choice for company formation because of various reasons. Because it is an advanced state with top-notch infrastructure and technologically modernized telecoms and internet industry, it is really a superb destination for business owners.

If you plan to form your company in Singapore, there are certain rules to follow. Refer to the Companies Act (CAP 50 of the 1994 Revised Edition of the Singapore Statutes) which, in general, is anchored on principles established in England.

There are 3 popular types of commercial business units, namely, private limited company, limited liability partnership and sole proprietorship. The most common type is the private limited company, on which the guidelines below are focused.

These are the fundamental legal prerequisites for company formation in Singapore: (1) At the least one shareowner who can be either be a local or foreign person; (2) At least one director who should be a natural person At the least 18 years old; (3) At least paid-up capital of S$1; (4) Locally registered address; (5) Eligible company secretary to be hired within 6 months of incorporation; (6) Approved business name that is specific and free of obscene language; and (7) Validated licenses and permits for specified business sectors i.e. private schools, child care and video companies.

The shareowner and director can be one and the same individual. Nonetheless, since banking companies and other financial houses will normally necessitate 2 signatories, it is advisable to have at the least 2 directors for the streamlined administering of company formation.

For proper company formation with regard to the private limited kind of business, it is important that the director has good credit standing and abides to the following measures: (1) A Singaporean citizen; (2) A Singaporean permanent resident; (3) An Employee Pass holder; (4) An Approval-In-Principal Employment Pass bearer; and (5) A Dependant Pass holder.

In certain situations, hiring the services of a professional consultancy firm is necessary when venturing into company formation. It is mandatory of foreigners to get assistance from professional consultancy firms. Local residents of Singapore may opt for self-incorporation, wherein the directors, secretary and shareholders must all be either Singapore citizens or permanent residents.

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