If you want to register a business in Singapore, you can choose from several types of companies, such as private limited companies, partnerships, and sole proprietorships.
These options differ in things like ownership structure, liability, and how much control you have over the business. Picking the right type can affect your taxes, the paperwork you need, and how you run your company day to day.
You’ll find that most business owners prefer to register a private limited company because it protects your personal assets and is seen as professional.
But you might also consider other choices like sole proprietorships or partnerships if you want something easy to set up with fewer rules. You can also look into limited liability partnerships, or even public companies, depending on your business plans.
Choosing the best company type for your goals can save costs and help your business grow. This article will explain the main types, so you can decide which fits you best.
Key Company Structures in Singapore
Singapore offers several ways to register a business. Each type has its own legal features, requirements, and uses. Knowing the main options helps you choose the structure that fits your needs.
Private Limited Companies (Pte Ltd)
A private limited company (Pte Ltd) is the most common choice for new businesses. This structure limits your liability to your shares in the company, so your personal assets remain protected. At least one shareholder, one director, and a company secretary are required. The director must be a Singapore citizen and live in Singapore.
You can have up to 50 shareholders, individuals or corporate entities. Private limited companies can raise capital more easily than sole proprietorships or partnerships. Company profits are taxed at the corporate tax rate, which is lower than personal income tax rates.
A major benefit is the protection of the business name and the separation of legal identity. This means the company can enter into contracts, own assets, or even sue and be sued in its own name.
Also Read: What is a Dividend and How Are They Paid Out?
Public Limited Companies
Public limited companies are formed when you have more than 50 shareholders or plan to list your company on the stock exchange. These companies are allowed to raise capital from the public by issuing shares.
There are two types: public companies limited by shares and public companies limited by guarantee.
Public limited companies must meet strict disclosure and compliance requirements. Directors and shareholders may be individuals or corporations. Public companies are watched closely by regulators and must share detailed financial information.
This structure is often chosen by large businesses aiming for significant growth or planning to spread ownership widely. Minimum requirements include at least 50 shareholders and a director living in Singapore.
Companies Limited by Guarantee
Companies limited by guarantee are often used by charities, non-profit groups, and clubs. Instead of shareholders, they have guarantors who promise to pay a set amount if the company is wound up.
These companies do not issue shares and cannot distribute profits to members.
The focus is on promoting activities for public benefit, not making profits. This model is best for organizations with social, educational, or community goals. Companies limited by guarantee must still follow rules set by Singapore’s authorities and file annual reports.
Setting up a company limited by guarantee requires at least one member and one director who lives in Singapore.
Also Read: How to Protect Minority Shareholders in a Shareholder Agreement
Exempt Private Companies
An exempt private company is a type of private limited company with special advantages. It has no more than 20 shareholders, and none of them can be a corporation. This makes it easier for small groups to start companies and reduce administrative work.
Exempt private companies enjoy certain benefits, such as fewer rules about filing accounts and more privacy. They do not have to submit audited financial statements if their revenue is below a specified amount.
This structure is popular with small businesses and family-owned companies. All directors must still follow Singapore’s laws and ensure annual returns are filed properly.
Other Business Entity Types
Singapore offers a range of business structures beyond just private limited companies. Here are some of them.
Sole Proprietorship
A sole proprietorship is the simplest form of business in Singapore. You run the business alone, so there is no legal separation between you and your business. If your business has any debts or lawsuits, you are fully responsible for the consequences.
Setting up a sole proprietorship is quick and has fewer compliance requirements. You do not need to file audited accounts, and annual filing is simple.
However, a sole proprietorship is not a separate legal entity, which means you cannot sell shares or raise funds easily. You may also find it harder to build credibility with banks or enter into major contracts.
Only Singapore citizens, permanent residents, or EntrePass holders can register this business type.
Partnerships
A partnership allows two or more people to jointly own and operate a business. There are two common types: general partnerships and limited partnerships. All partners share profits, losses, and liabilities according to the partnership agreement.
General partnerships do not protect your personal assets. If one partner causes a loss, the other partners share responsibility. On the other hand, limited partnerships allow some partners to be passive investors with liability only up to the amount they invested.
Partnerships do not pay corporate tax. Instead, profits are taxed as the partners’ personal income. Registration and management are straightforward, but conflicts between partners may affect business stability.
Also Read: Navigating COMPASS Together: Your Employment Pass Journey Starts Here
Limited Liability Partnerships
A Limited Liability Partnership (LLP) combines elements of partnerships and companies. An LLP is a separate legal entity, which means it can own assets, sue, or be sued in its own name. In an LLP, each partner’s liability is limited by their investment, and they are not responsible for other partners’ mistakes.
This structure is ideal if you want the flexibility of a partnership with better liability protection, such as for law or accounting firms. LLPs must file annual declarations, but do not need to file audited accounts unless they have corporate partners.
Profits are distributed among partners and taxed as personal income. An LLP also allows you to use the words “Limited Liability Partnership” or “LLP” after your business name, which signals your structure to clients and stakeholders.
Legal Requirements and Registration Process
You must know the legal requirements before setting up a company in Singapore. These requirements cover how you interact with the authorities, complete the incorporation, and handle company shares.
Role of ACRA
The Accounting and Corporate Regulatory Authority (ACRA) is Singapore’s official company registrar. You must register your business with ACRA before you can operate legally.
This applies to all company types, such as private limited companies, partnerships, and public companies.
ACRA checks your company name for availability and ensures your registration information is correct. It also enforces rules about company directors, shareholders, and local addresses.
Every year, you must file statutory documents, including annual returns and financial statements with ACRA.
Learn more about ACRA’s role and how to register your business at this ACRA guide.
Choosing the Right Company Type for Your Needs
Finding the best company structure for your goals will depend on factors like ownership, legal risks, and business size. Understanding key differences will help you make a choice that matches your plans for the future.
Also Read: How Singapore’s Employment Pass (EP) Requirements Have Changed Under COMPASS
Key Differences Between Company Structures
Here’s a quick look at some common company types:
| Company Type | Ownership | Liability | Setup Complexity | Suitable For |
| Private Limited Company (Pte Ltd) | 1–50 shareholders | Limited to investment | Moderate | Growth-focused businesses |
| Sole Proprietorship | 1 owner | Unlimited | Simple | Small, low-risk businesses |
| Partnership | 2–20 partners | Usually unlimited | Simple | Shared business operations |
| Limited Liability Partnership (LLP) | 2 or more partners | Limited | Moderate | Professionals and joint ventures |
Your Singapore Partner
At HC Consultancy Services, we guide entrepreneurs through selecting the optimal business structure for their Singapore ventures.
Whether you require the protection of a private limited company, the simplicity of a sole proprietorship, or the flexibility of a partnership, our team provides tailored advice aligned with your specific objectives.
With our expertise in Singapore’s regulatory environment, we streamline your registration process and position your business for sustainable growth and success.
Frequently Asked Questions
In Singapore, you can choose from several types of companies based on your business needs and liability preference. Company registration rules, legal differences, and setup steps depend on the structure you pick.
1. What are the different categories of business entities recognized by ACRA in Singapore?
ACRA recognizes these main business entities: sole proprietorships, partnerships, limited partnerships, limited liability partnerships, private limited companies, and public companies. Each category has specific rules for ownership, liability, and operations.
2. What are the specific requirements for setting up a private limited company in Singapore?
To set up a private limited company, you need at least one shareholder and one resident director. You must appoint a company secretary within six months and register a local business address. There are also annual filing and compliance obligations to meet. Learn more from ACRA’s page about company types.
3. Can you explain the differences between a sole proprietorship, a partnership, and a private limited company in Singapore?
A sole proprietorship is owned by one person who has full personal liability for debts. Partnerships can have two or more owners who share profits and liability. In a private limited company, liability is limited to your investment, and the company is a separate legal entity from its owners. Find more details in this overview of types of business structures.
4. What is a company limited by guarantee in Singapore, and under what circumstances is it formed?
A company limited by guarantee does not have share capital or shareholders. Its members act as guarantors and agree to pay a set amount if the company winds up. This structure is common for non-profit organizations, charities, and clubs where profits are not distributed to members.
5. How do limited liability partnerships (LLPs) in Singapore differ from traditional partnerships?
In a limited liability partnership (LLP), each partner’s personal liability is limited. This means you are not held personally responsible for other partners’ wrongdoings or debts. A traditional partnership does not offer this protection, and all partners can be held personally liable for business obligations
5. What legal and financial differences exist between a private company limited by shares and a public company in Singapore?
A private company limited by shares can have up to 50 shareholders and cannot offer shares to the public. It has lower compliance requirements. A public company can have unlimited shareholders and can raise funds by selling shares to the public, but it faces stricter regulations and reporting standards. For further details, see this explanation of Singapore company types.
