LLP to Pte Ltd Conversion in Singapore
Converting your LLP to a Pte Ltd company in Singapore involves a few key steps:
1. Obtain Consent and Prepare for Incorporation:
Draft a "No Objection Letter" stating your intent to convert and reasons behind it.
Decide if you want to keep your existing business name for the Pte Ltd company.
2. Incorporate the Pte Ltd Company:
Get your desired company name approved by the Accounting and Corporate Regulatory Authority (ACRA) of Singapore https://www.acra.gov.sg/.
Appoint a local resident director for the Pte Ltd company.
Engage a company secretary within six months of incorporation.
Pay the necessary incorporation fees to ACRA.
3. Transfer Business Undertakings:
Once the Pte Ltd company is incorporated, transfer assets, contracts, and other business matters from the LLP to the new company.
4. Terminate the LLP:
Within three months of incorporating the Pte Ltd company, submit a Notice of Cessation to ACRA to formally close the LLP.
Additional Tips:
Ensure all outstanding debts and liabilities of the LLP are settled before termination.
Existing business licenses and permits might need to be reapplied for under the new Pte Ltd company.
If You Want to Keep Your Existing Business Name
Keeping your existing business name for the Pte Ltd company in Singapore requires an additional step during the incorporation process:
1. No Objection Letter:
In your No Objection Letter to ACRA, clearly state your desire to retain the existing business name for the Pte Ltd company.
Explain the reason for wanting to keep the name (e.g., brand recognition, established customer base).
Mention if the owners of the LLP will be the same for the Pte Ltd company.
2. ACRA Approval: While incorporating the Pte Ltd company, submit your desired name (previously used by the LLP) for approval by ACRA. There's a chance it might not be automatically approved due to existing company names.
ACRA might request a justification for using the same name, which your No Objection Letter will support.
Here are some additional points to consider:
If the name is not approved, you'll need to propose alternative names for the Pte Ltd company.
ACRA might be more likely to approve the name if there's a clear connection between the LLP and the Pte Ltd company (e.g., similar ownership structure).
It's recommended to:
Check for existing company name registrations similar to yours on ACRA's website before finalizing your decision.
Consider having a backup name option in case the original name is unavailable.
By following these steps and providing a well-reasoned No Objection Letter, you increase the chances of keeping your existing business name for the Pte Ltd company.
Transfer Assets, Contracts, and other Business Matters
Transferring assets, contracts, and other business matters from your LLP to the new Pte Ltd company in Singapore involves several steps:
Assets:
1. Valuation: Determine the fair market value of all assets being transferred (e.g., equipment, inventory, intellectual property). This might require professional valuation for specific assets.
2. Transfer Agreement: Draft a formal agreement between the LLP and the Pte Ltd company outlining the asset transfer details:
Include a detailed list of assets being transferred.
Specify the transfer price (usually fair market value).
Define any warranties or guarantees associated with the assets.
3. Accounting Treatment: Record the asset transfer in the financial statements of both the LLP and the Pte Ltd company.
The LLP will record a disposal of assets, and the Pte Ltd will record an acquisition of assets.
4. Contracts:
Review and Negotiation: Review all existing contracts (e.g., service agreements, leases) to assess if they can be transferred to the new company.
Some contracts might require renegotiation with the other party to reflect the change in ownership.
Assignment or Novation: Depending on the contract terms, you might need to:
Assign the contract to the Pte Ltd company, with the original counterparty's consent.
Negotiate a novation, creating a new contract between the Pte Ltd company and the other party.
Notification: Inform all relevant parties (e.g., vendors, customers) about the change in ownership and provide the new company's contact details. Update any contracts or agreements accordingly.
Other Business Matters:
Licenses and Permits: Existing licenses and permits might not be transferable. Check with the issuing authority to determine if the Pte Ltd company needs to apply for new ones.
Bank Accounts: Close the LLP's bank accounts and open new ones under the name of the Pte Ltd company. Ensure all future transactions are conducted through the new accounts.
Employees: Employment contracts typically remain valid even after a change in ownership. However, it's advisable to review and update them if necessary.
Taxation: Consult a tax advisor to ensure a smooth transition regarding taxes (e.g., Goods and Services Tax registration) from the LLP to the Pte Ltd company.
Additional Tips:
Maintain a clear record of all transferred assets, contracts, and communication with relevant parties.
By following these steps, you can effectively transfer assets, contracts, and other business matters from your LLP to the new Pte Ltd company in Singapore.
Incorporation fees
The incorporation fees for converting your LLP to a Pte Ltd company in Singapore consist of two main parts:
1. ACRA Fees:
These are the official fees charged by the Accounting and Corporate Regulatory Authority (ACRA) for registering the Pte Ltd company.
They are relatively low:
Name application fee: S$15
Registration fee: S$300
You can find the full list of ACRA fees here: https://www.acra.gov.sg/how-to-guides/company-related-fees
2. Corporate Service Provider Fees (Optional):
Engaging a corporate service provider can simplify the conversion process.
Their fees vary depending on the services offered, typically ranging from S$500 to S$1,500.
These services might include:
Assisting with the No Objection Letter and name application.
Handling the Pte Ltd company incorporation process with ACRA.
Drafting necessary documents and resolutions.
Total Cost:
The total cost for incorporation fees can range from:
S$315 (minimum): This includes only the mandatory ACRA fees (name application + registration).
S$815 to S$1,800 (estimated): This adds the estimated range for corporate service provider fees to the ACRA fees.
Additional Notes:
These are estimated costs and might vary depending on specific circumstances.
There could be additional fees for complex company structures or special requirements.
Here are some resources that you might find helpful:
Converting a Sole Proprietorship to a LLC / Pte Ltd company: https://www.bestar-sg.com/post/converting-a-sole-proprietorship-to-a-llc---pte-ltd-company
Converting from LLP to Pte Ltd in Singapore: A Step-by-Step Guide: https://www.bestar-asia.com/post/converting-from-llp-to-pte-ltd-in-singapore-a-step-by-step-guide
How Bestar can Help
Bestar can be your ally in ensuring a smooth conversion from an LLP to a Pte Ltd company in Singapore. Here's how we can be of significant help:
Streamlining the Process with Expertise:
Experience is key: We've handled numerous LLP to Pte Ltd conversions and understand the intricacies involved.
Guidance throughout: We can walk you through every step, saving you valuable time and effort compared to navigating it alone.
Efficient document handling: We can prepare and submit all required documents to ACRA accurately and efficiently, avoiding delays.
Reducing Risk and Ensuring Compliance:
Legal and regulatory expertise: We can identify potential legal or regulatory hurdles and help you address them effectively.
Drafting essential documents: We can draft crucial documents like the No Objection Letter and transfer agreements, ensuring they adhere to legal requirements.
Meeting deadlines: We can help you meet all filing deadlines with ACRA, preventing any potential penalties.
Offering Additional Valuable Services:
Beyond incorporation: Bestar offers additional services like company secretary appointments, opening corporate bank accounts, and assisting with tax registration.
Liaison services: We can act as a bridge between you and ACRA or other relevant authorities.
Ongoing support: We can provide ongoing support and guidance even after the conversion is complete.
Overall Benefits of Using Bestar:
By engaging Bestar, you can achieve several key benefits:
Reduced workload and stress: Free yourself and your team from the complexities of the conversion process.
Increased confidence: Gain peace of mind knowing the conversion is handled legally and compliantly.
Potentially faster turnaround: The process might be completed more quickly compared to doing it yourself.
Bestar can significantly streamline the conversion process. Our expertise can undeniably contribute to a smoother and more efficient conversion of your LLP to a Pte Ltd company in Singapore.
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