Basic Business Structures in Singapore By Jacqueline Chia Before starting a business in Singapore, it is important for a person to determine what structure is the most applicable for the operation and the one that can help him meet his business goals. According to business registration firm Rikvin, there are three basic types of business structures in Singapore: the sole proprietorship, partnership, and company. Sole proprietorship is the simplest and most flexible structure since only one owner will make the decisions for his business. However, one downside is that the owner is personally liable for the debts and losses of his business since it is not considered a legal entity (which means that it cannot be sued or hold properties under its name). In terms of taxation, the profits from the sole proprietorship are taxed at personal income tax rates. Another business structure is the partnership which is owned by two or more individuals. Meanwhile, partnership has two categories: the limited liability partnership in which all the partners enjoy limited liability (their personal assets cannot be liquidated to pay off the business debts), and the limited partnership which requires at least one general partner or someone who is personally liable for the losses of his business. And lastly, the company which is said to be the most ideal structure due to its countless of advantages. â€œWhile there are many formalities and procedures to comply with, most corporate lawyers and experts believe the company is the most viable structure especially for those businessmen who have bigger goals,â€? Rikvin said. One of the most notable benefits of a company is the perpetual existence since it is treated as a separate legal entity from the shareholders (the term used for company owners). With this, a business will continue its existence despite the change of management and shareholders. Under the Singapore Companies Act, there should be at least one shareholder and one resident director who may be the same person. However, a significant number of companies appoint two directors since banks and other financial institutions in the country require two signatories. In 2007, the government has lowered the corporate tax from 18 to 17 percent in an effort to attract foreign and local businessmen from setting up a Singapore company. In addition to this benefit, companies also enjoy a single tier tax system in which they are only taxed at a corporate level while the shareholderâ€™s dividends are not subjected to taxes.
ABOUT THE PUBLISHER: Since 1998, Rikvin consultancy has been providing highly professional company incorporation services, both in attractive standard packages as well as customised services. Online incorporation being a hallmark service, other services of Rikvin include Offshore Incorporation, EntrePass, Singapore Employment Pass, Personalised work Pass application, GST Registration, Accounting Services, Tax Planning & Consulting, and Business Plan Drafting. Rikvin Pte Ltd http://www.rikvin.com/ 20 Cecil Street, #14-01, Equity Plaza, Singapore 049705 Main Lines : (65) 6438 8887 Fax : (65) 6438 2436 Email: firstname.lastname@example.org
Published on Sep 17, 2010
Before starting a business in Singapore, it is important for a person to determine what structure is the most applicable for the operation a...