One of the most common questions we get is “Can I incorporate a company in Singapore without any shareholders?”, and we hope to bring some clarity to this question. The answer is quite straightforward – a private limited company must have a minimum of one shareholder, according to Singapore company laws.
However, if you plan 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 with 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. With this structure, you can incorporate a company in Singapore without any shareholders.
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.
Learn more about the requirements to set up a sole proprietorship.