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Private Limited Company

Private Limited Company is the most popular and preferred form of business entity due to its separate legal entity status and ease of formation.

A Private Limited Company usually has the words “Pte. Ltd.” as part of its name, which are the abbreviations for Private Limited.

Features of Private Limited Company

  1. An individual or a company, whether local or foreign, can be the owner (shareholder) of a Private Limited Company.
  2. It is a separate legal entity, therefore:
    • The shareholder’s liability is restricted to the share(s) subscribed;
    • It can sue or be sued in its name;
    • It can acquire and hold property in its name;
    • It can have a common seal in its name;
    • It may do any other legal activities in its name.
  3. There must be at least 1 shareholder and shall not exceed 50 shareholders.
  4. There must be at least 1 director appointed to run the business for the shareholder, however, the shareholder can be appointed as the director simultaneously.
  5. It is entitled to the tax incentives, namely:
    • *Tax exemption scheme for new start-up companies – For the first 3 years from incorporation, the tax rate is effectively 5.67% on the first S$300,000 of chargeable income, provided there is an individual shareholder holding at least 10% shares throughout the basis period.
    • *Partial tax exemption scheme for companies – In the event that a company is not qualified for the “tax exemption scheme for new start-up companies”, it will be given partial tax exemption. The tax rate is effectively 8.36% on the first S$300,000 of chargeable income.

*For both of the tax exemption schemes, chargeable income in excess of S$300,000 will be taxed at the prevailing corporate tax rate, which is currently at 17%.

Requirements of setting-up a Private Limited Company

  1. There must be at least 1 director and 1 secretary, who are ordinarily residents in Singapore.
  2. The company must have a registered office address in Singapore.
  3. The minimum paid-up share capital is S$1.

Documents Required

  1. Desired name of business entity
  2. Brief description of principal activities
  3. Particulars of shareholders
  4. Particulars of directors
  5. Registered business address
  6. Particulars of company secretary
  7. Memorandum & Articles of Association
  8. Completed application forms

Procedure

  1. Application for Entity Name (subject to availability and approval by ACRA required)
  2. Registration of the business

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