Establishing a Company in Singapore: From Name Reservation to Incorporation

Embarking on the journey of establishing a business in Singapore entails navigating a landscape of unparalleled opportunities. From gaining access to a global market to benefiting from a favorable tax regime and a nurturing business environment, the process of company incorporation in Singapore offers a multitude of advantages.

In this comprehensive guide, we will meticulously outline the essential steps involved in incorporating a company in Singapore, ensuring a seamless transition from conceptualization to establishment. Our structured approach will be delineated across three pivotal stages:

1.     Name Reservation;

2.     Incorporation; and

3.     Post-Incorporation.

This article will meticulously delve into the initial step: Application for Name Reservation. This foundational stage is paramount for effectively securing the identity of your business, laying a robust groundwork for future endeavors.

Name Reservation

"Name Reservation" is the initial step in incorporating a company in Singapore. In the Accounting and Corporate Regulatory Authority (the "ACRA"), name reservation refers to the process of reserving a company name before incorporation. This reservation period allows a business owner to secure a desired company name before proceeding with registration. Additionally, the purpose of this process is to ensure the name does not infringe on any existing trademarks and complies with the guidelines established by the ACRA.

Upon approval of the name application, the ACRA will reserve the name for 120 days. If anyone does not proceed to register the business or incorporate the company within this period, the reservation will expire, and the name will be released for anyone to register.

To choose a suitable name for a company, certain name applications may be referred to referral authorities for approval, especially if the proposed business name contains sensitive terms such as "school," which may necessitate review by relevant regulatory bodies. The processing time for referred applications typically ranges between 14 and 60 days. For those intending to apply for charity status, additional guidelines and criteria can be found on the Charity Portal.

Additionally, the process of registering a business name incurs a nominal fee of S$15.

In preparation for the name reservation process, it is imperative to consider and prepare the following criteria along with the application:

1. Choosing the Singapore Standard Industrial Classification (SSIC) Code

2. Determining the Company Structure

3. Appointing Directors, Company Secretary, and Other Key Personnel

4. Option to Register an Alternate Address

5. Endorsement

1.     Choosing the Singapore Standard Industrial Classification (the "SSIC") Code

The SSIC code plays a crucial role in classifying a company's business activities in Singapore for both statistical and regulatory purposes. During the name application process, it's essential to select the most relevant SSIC code that corresponds to your intended business activity, designating both primary and secondary activities.

It's important to note that a company can have a maximum of two SSIC codes, with one being the minimum requirement. For the primary activity, it's typically referred to as the main focus or core business of the company. For the secondary activity, it's typically referred to as an additional or supplementary business endeavor undertaken by the company.

In the event of a major decision, such as changing a company’s principal business activity, it cannot be undertaken unilaterally. In larger companies with multiple shareholders, such a proposal would typically undergo a vote at a general meeting. The exact procedures for such decisions would depend on the company’s constitution, as the Singapore Companies Act does not specify precise details.

Apart from signaling shareholders' intent to change the company’s principal business activity, the resolution also serves as a permanent record of confirmation for the decision, aiding auditors in verifying transactions and internal controls. It's imperative that the resolution state the reason for the change in business activity.

Upon the successful passing of a resolution, it's mandatory to notify the ACRA of the change in principal business activity within 14 days. Failure to comply will result in late lodgement fees, as stipulated under Section 14(1) of the Business Registration Act, with the penalty escalating based on the duration of the default.

2.     Determining the Company Structure

Deciding on the appropriate company structure is fundamental to aligning with your business goals and objectives.

Here's a breakdown of the key types of business structures available:

2.1        Sole-Proprietorship

2.2        Partnership

2.3        Limited Partnership (LP)

2.4        Limited Liability Partnership (LLP)

2.5        Company

2.5.1    Exempt Private Company

2.5.2    Private Company Limited by Shares

2.5.3    Public Company Limited by Shares

2.5.4    Public Company Limited by Guarantee

2.5.5    Unlimited Private Company

2.5.6    Unlimited Exempt Private Company

2.5.7    Unlimited Public Company

2.6        Variable capital companies (VCC)

In Singapore, the most common types of business entities include private limited companies (Pte Ltd.), limited liability partnerships (LLP), and sole proprietorships. Each structure has distinct advantages and requirements, necessitating careful consideration.

For further insight into choosing the most suitable company structure for your business, refer to our comprehensive article on company structures at https://www.linkedin.com/pulse/cultivating-success-why-singapore-your-memlc/?trackingId=G4TBzKyT9Y7nGPbyXx5fHg%3D%3D.

3.     Appointing Directors, Company Secretary, and Other Key Personnel

In compliance with Singaporean regulations, a company is mandated to appoint at least one director and a company secretary who are residents of Singapore. Additionally, it requires a minimum of one shareholder, whether an individual or a corporate entity.

Directors - Directors hold a pivotal role in overseeing the company's affairs, ensuring adherence to regulatory standards as outlined in the Companies Act. They are entrusted with managing the company's operations, setting strategic directions, and maintaining accurate records. Directors are legally obligated to act in the best interests of the company, exercising their powers honestly and in good faith.

The consequences of breaching directorial duties can range from civil to criminal penalties. Offences may result in fines up to S$5,000 or imprisonment for up to two years. Severe breaches could lead to disqualification from directorship for up to five years.

Requirements for a company director entail being at least 18 years old, possessing full legal capacity, and holding Singaporean citizenship, permanent residency, or relevant work passes. Foreign identification number (FIN) holders must ensure eligibility before assuming directorial roles.

Company Secretary - Furthermore, within six months of incorporation, companies must appoint a company secretary, a resident of Singapore, to oversee administrative matters and ensure statutory compliance. Failure to do so within the stipulated timeframe may incur penalties.

The duties of a company secretary include maintaining company registers, preparing meeting minutes, and keeping stakeholders informed about statutory obligations. The company secretary must be a natural person locally residing in Singapore.

Auditors - Auditors appointment is mandatory unless exempted by relevant sections of the Companies Act. This appointment must be made within three months of incorporation, ensuring compliance with audit requirements.

Other Key Personnel - Additional appointments such as auditors, chief executive officers, or managing directors may be necessary depending on the company's structure and operations, enhancing effective management and governance.

4.     Option to Register an Alternate Address

For heightened corporate transparency, certain details regarding company officers are accessible through ACRA's public records. However, if privacy concerning your residential address is preferred, registering an alternate address is a viable option. This can be done for a nominal fee of S$40 at the point of incorporation or subsequently.

The alternate address must be a location where you can be contacted, such as your office or your corporate service provider’s office, within the same jurisdiction as the residential address. Notably, it cannot be a P.O. Box address. Once registered, the alternate address will be displayed in ACRA’s public records in lieu of your residential address. Nevertheless, all official correspondence from ACRA will continue to be directed to the residential address.

5.     Endorsement

Following the submission of an application to incorporate a local company, all proposed company directors and the appointed company secretary are required to endorse their appointments online via BizFile+. Endorsement entails entering the email address of the appointed individual, who will then receive an email notification containing a link. Through this link, the appointed person can log in via Singpass and complete the necessary declaration to acknowledge and agree to the appointment.

It's imperative to ensure that endorsements are completed online within 14 days from the initial submission date. Failure to do so will result in the lapse of the application, necessitating the submission of a new one. Therefore, it's advisable to inform all relevant parties beforehand to prevent any delays in obtaining their endorsement.

Engaging a registered filing agent can streamline this process, as they can facilitate the endorsements on behalf of the company. This not only ensures compliance but also expedites the incorporation procedure.

6.     Conclusion

Ensuring a smooth and compliant name reservation process for your company in Singapore requires careful preparation and strict adherence to regulatory standards. Our team is dedicated to guiding you through every step with confidence, ensuring your application meets all legal obligations.

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TVS Corporate Services Pte. Ltd.

At TVS Corporate Services Pte. Ltd., we provide professional advisory services to help you navigate the complexities of corporate governance and ensure that your company complies with all statutory obligations. Whether you need assistance with director appointments, secretarial services, or understanding the roles of various company officers, we are here to support your business.

For more information or personalized guidance, please contact us via WhatsApp at http://wa.me/+6588693738 or via email at chloe@tvscorporation.com. We look forward to assisting you in achieving your business goals.

Disclaimer

The information provided in this article is intended solely for general informational purposes and does not constitute professional advice. While every effort has been made to ensure the accuracy, completeness, and reliability of the information, TVS Corporate Services Pte. Ltd. makes no representations or warranties, either express or implied, regarding the adequacy, accuracy, reliability, completeness, or suitability of the information contained herein.

This article is not a substitute for professional consultation or advice. Readers are strongly encouraged to seek independent professional advice tailored to their specific circumstances before making any decisions based on the information presented.

TVS Corporate Services Pte. Ltd., its affiliates, and its representatives shall not be liable for any loss, damage, or injury, whether direct, indirect, incidental, consequential, or otherwise, arising from the use of, or reliance on, the information contained in this article.

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