Incorporation of a company is nothing but the legal procedure of declaring the corporate entity as a separate legal entity. The idea is to separate the entity from its owners due to the advantages that is has. The decision to incorporate a company comes from the various advantages that the process has to offer. The separation of the company’s liabilities from the owners’ assets is possibly one big advantage, allowing for easy transfer of ownership in the future. Not only that, a company registered as incorporation generally has a lower tax rate than on personal incomes of the owners.
The current economic trend is more about entrepreneurial capitalism of sorts wherein the driving forces of the economy are the startups. The decision to register a business or any other entity involves a few basic pointers. Before one goes ahead with registering one’s organization (business/ government) as incorporation, there needs to be clarity on some key things before proceeding with the registration.
While on the one hand it is a well established fact that investment options in Singapore are always thriving, we must also keep in mind that incorporation company registration can be an elongated process and we must adhere to certain rules in order to avoid the hassle. Following are the five things to know before an incorporation company’s registration:
Clearly defining the business activities of the company
The Government in Singapore has considerable control over the business activities. The best way to avoid any unnecessary interference by the authority is to obtain all the required licenses and permits. Specific licenses are required if you are looking to import, manufacture or sell any product within the territory of the country. Prior to the incorporation of your business, you must make sure that you have all these prerequisites covered to have a hassle free operation in the future.
The capital amount
Different business sectors demand for different starting capital. However, in case of most sectors, you are allowed to incorporate a company with just a token amount of S$1. You must make sure that you are adhering to the minimal capital requirement limit for your business. Although you may want to just fulfill the minimum requirement, it is always desired to have a higher capital in hands. Also, the law provides you the freedom to hold your capital in any currency of your choice.
Company name and verification
If your first choice for the company’s name gets approved, it takes just a few hours to register your company. However, in case your first choice is already taken by someone or is not acceptable due to some reason, the registration process may get elongated. Thus, it is always advised to keep more than one name handy with you. Also, in case you are willing to include general words like Bank, school or travel agency, you process may be extended. This is because addition of these words to your company’s name needs the approval of the regulatory body of the company registration.
Singapore’s laws allows for 100% foreign ownership. This implies that you can register the company with just a single shareholder (minimum) to begin with. The shares can also be owned by legal entities. Although the laws don’t put a limit on the number of foreign directors that the company may possess, the law says that the company must have at least one director who is a local resident of Singapore. Similarly, the company must also have at least one corporate secretary of Singapore who holds all the necessary knowledge of the Singapore laws.
Other important documentation
Unlike a number of other countries, Singapore doesn’t allow the companies to keep a Post Office Box address. The company must obtain a registered local address in Singapore. You must also keep adequate time in your hands for other processes such as opening a Bank account and obtaining licenses. The time it takes to open a bank account would entirely depend upon the bank chosen by you.
These were five of the few things to be kept note of while registering an incorporation company. Since it separates the owners from the company, it is important at the end to keep in mind the basic purpose with which the owners come together in the first place.