According to Singapore company laws, a private limited company must have a minimum of one shareholder. Anyone who intends to operate a business in Singapore which does not have any shareholders has the options of starting either a sole proprietorship or a partnership.
Shareholders play extremely important roles in such companies. As the collective owners of a Singapore-based company, shareholders are granted certain rights and decision-making powers. Shareholders of a company based in Singapore may either be local or foreign. Private companies can be 100% owned by foreigners.
Many chose to incorporate a sole proprietorship because it is the easiest and least costly of all business structures to set up, unlike the set up of other forms of business where there will be so many formalities and compliance requirements.
One major advantage of a sole proprietorship all profits generated will go directly to the sole proprietor.
The downside to this is that in a sole proprietorship, the business and its owner are considered a single legal entity. This means that the business owner is personally liable for the debts of the business and any other legal action taken against it. You can also be sued in a personal capacity and the worst of it all, it will deem you to have an unlimited liability. Therefore, if anything of such happens, it will put your personal assets at risk.
In deciding the type of partnership to set up, consider the following factors:
What liabilities and responsibilities are you prepared to assume?
What is the tax implications?
Is the business entity easy to close?
What are the advantages and disadvantages of the different business entities?
If you’re at crossroads on what kinds of entity to select, approach Paul Hype Page & Co. We help clients understand the most suitable business entity for the business activities which are to be performed.
“ Integrity and professionalism is what they’re all about, and Paul Hype Page & Co. helped me do everything I didn’t know how to do and what I didn’t have time to do especially with their one of the kind online ibizfile portal, which allows me to get the setup of my company all done before i am even in Singapore physically! Cheers to that! ”
Rights of Shareholders in a Singapore Company
One of the most important rights possessed by a Singapore company’s shareholders is that of the right to receive a portion of the company’s profits. They receive this portion of the profits in the form of dividends. The details about how shareholders are to receive dividends are usually detailed in a shareholders’ agreement.
However, companies which do not have a shareholders’ agreement may nevertheless provide their shareholders with dividends according to the proportion of the company’s shares which they hold. Shareholders also have the right to approve auditors for the company. Should the shareholders deem such a move necessary, they may even choose to remove one or more of the company’s current directors.
Another right of shareholders of a Singapore company is that of attending the company’s general meetings as well as voting during these meetings. Such meetings include annual general meetings (AGMs) and extraordinary general meetings (EGMs). These meetings play important roles in charting the future business path of the company; therefore, shareholders have much of a say in the future of the company’s business prospects.
Before deciding on the type of vehicle your business is embarking on, you should consider the pros and cons of each carefully. While it may seem complicated, Paul Hype Page is here to help you find the best option in setting up your business. We wish you all the best.
Can I run an online business without incorporating in Singapore?Tiwi2020-11-20T11:59:02+08:00