COMPARISON OF DIFFERENT
BUSINESS ENTITIES IN SINGAPORE
Copyright © 2014 Rikvin Pte LtdLast updated June 20, 2014 4:37 PM
DIFFERENT BUSINESS ENTITIES IN SINGAPORE: A COMPARISON
K...
Copyright © 2014 Rikvin Pte LtdLast updated June 20, 2014 4:37 PM
Sole Proprietorship Partnership Limited Partnership (LP)...
Copyright © 2014 Rikvin Pte LtdLast updated June 20, 2014 4:37 PM
Sole Proprietorship Partnership Limited Partnership (LP)...
Copyright © 2014 Rikvin Pte Ltd
RIKVIN PTE LTD
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Comparison of Singapore Business Entities

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Comparison of Singapore Business Entities

  1. 1. COMPARISON OF DIFFERENT BUSINESS ENTITIES IN SINGAPORE
  2. 2. Copyright © 2014 Rikvin Pte LtdLast updated June 20, 2014 4:37 PM DIFFERENT BUSINESS ENTITIES IN SINGAPORE: A COMPARISON Key Considerations When Choosing a Singapore Business Structure • What is the nature of the business you want to undertake? • How many owners will be there? • How much capital will you invest? • What risks are you able to take? • What is the long term plan for your business? • What are the advantages and disadvantages of the different business entities? • Is the business entity easy to close?
  3. 3. Copyright © 2014 Rikvin Pte LtdLast updated June 20, 2014 4:37 PM Sole Proprietorship Partnership Limited Partnership (LP) Limited Liability Partnership (LLP) Company Definition • A sole-proprietorship is a business owned by one person. • The sole-proprietor has the absolute say in the running of the business. • A partnership is a business firm formed by a minimum of 2 partners. • The maximum number of partners allowed is 20. • A partnership consisting of 2 or more partners where at least 1 partner is a General Partner (GP) and 1 is a Limited Partner (LP). • No limit on numbers of partners. • Partnership where the partners’ liabilities are generally limited. • No limit on numbers of partners. • A business entity registered under the Companies Act, Chapter 50. • Exempt Private Company –20 members or less and no corporation holds beneficial interest in the company’s shares • Private Company – 50 members or less • Public Company – can have more than 50 members Who can set up • Singapore Citizen/ Singapore Permanent Resident/Employment Pass /Dependant Pass Holder/Foreigner. • A foreigner must appoint a local manager. • At least 2 Singapore Citizens/Singapore Permanent Residents/ Employment Pass / Dependant Pass Holders/Foreigners. • A foreigner must appoint a local manager. • Any foreign and/or local individual and/or company. • Must appoint a local manager if all General Partners reside outside Singapore. • Any foreign and/or local individual and/or company. • Must appoint a local manager. • Any foreign and/or local individual and/or company. • Must have a local director. • If a foreigner wishes to act as a local director of the company, he can apply for an Employment Pass. Suitable For Low risk business to be run by an individual Professional firms like accountants, lawyers etc. N.B. professionals like lawyers and accountants can also set up a company to provide services Where one partner is ready to bear unlimited risk. • The newest business incorporation structure in Singapore combining the features of partnerships and companies. • The biggest difference with a company is that the partners are taxed at their individual personal tax rate and are not eligible to the tax exemptions available for a company. • Most advanced and flexible business entity. • Most popular option Legal Status Not a separate legal entity Not a separate legal entity Not a separate legal entity Separate legal entity Separate legal entity Personal Liability Owner has unlimited liability Partners have unlimited liability General partner has unlimited liability Limited partners have limited liability • Partners personally liable for debts and losses resulting from their own actions • Partners not personally liable for debts and losses of LLP incurred by other partners Members have limited liability Owing Property Owner can own property Cannot own property in firm’s name Cannot own property in firm’s name Can own property in LLP’s name Can own property in company’s name DIFFERENT BUSINESS ENTITIES IN SINGAPORE: A COMPARISON
  4. 4. Copyright © 2014 Rikvin Pte LtdLast updated June 20, 2014 4:37 PM Sole Proprietorship Partnership Limited Partnership (LP) Limited Liability Partnership (LLP) Company Tax Taxed at owner’s personal tax rate Taxed at owner’s personal tax rate Taxed at partners’ personal/corporate tax rate Taxed at partners’ personal/corporate tax rate Taxed at corporate tax rate Tax Exemptions Available Personal Tax Relief if applicable Personal Tax Relief if applicable • Personal Tax Relief if applicable. • Corporate Tax Relief if the Corporate Partner is eligible. • Personal Tax Relief if applicable. • Corporate Tax Relief if the Corporate Partner is eligible. • Start Up Tax Exemption • Partial Tax Exemption • Dividends tax exempt in the hands of shareholders in Singapore Formalities • Quick and Easy to Set Up • Easy to Administer • Minimal Registration Cost • Registration to be renewed annually • Quick and Easy to Set Up • Easy to Administer • Minimal Registration Cost • Registration to be renewed annually • Quick and Easy to Set Up • Easy to Administer • Minimal Registration Cost • Registration to be renewed annually • Quick and Easy to Set Up • Easier to Administer compared to a Company • One time registration • Annual declaration of solvency must be lodged by one of the managers • More costly to set up • More formalities to administer • Must appoint a company secretary within 6 months of incorporation • Must appoint an auditor within 3 months of incorporation 9unless exempt) • Various books of records need to be maintained • Annual Returns to be filed Continuity in Law As long as the owner is alive and wished to carry on the business Subject to partnership agreement Subject to partnership agreement Perpetual succession unless wound up or struck off Perpetual succession unless wound up or struck off Closing the Business • By Owner - Termination or Cessation of business • By Registrar – if the registration has expired and has not been renewed • By Owner - Termination or Cessation of business • By Registrar – if the registration has expired and has not been renewed • By general partner - cessation of LP • By Registrar – if the registration has expired and has not been renewed • Winding Up – Voluntarily by members or creditors, Compulsorily by the High Court • Striking Off • Winding Up – Voluntarily by members or creditors, Compulsorily by the High Court • Striking Off DIFFERENT BUSINESS ENTITIES IN SINGAPORE: A COMPARISON
  5. 5. Copyright © 2014 Rikvin Pte Ltd RIKVIN PTE LTD 20 Cecil Street, #14-01, Equity Plaza, Singapore 049705 Main Line : (+65) 6320 1888 Fax : (+65) 6438 2436 Email : info@rikvin.com Website : www.rikvin.com Reg No 200100602K EA License No 11C3030 The information contained herein is intended for general information purposes only and shall not be regarded as professional advice. Readers are therefore advised that before acting on any matter arising from these notes, they should discuss their particular situation with the Firm. No liability can be accepted for any action taken as result of reading the notes without prior consultation with regard to all relevant factors. DOWNLOAD THE RIKVIN MOBILE APP FOLLOW US ON:

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