Setting Up a Local Company - Accounting and Corporate Regulatory Authority
- a22162
- Jan 10
- 13 min read
Updated: Feb 13
Setting Up a Singapore Company
Setting Up a Local Company: Accounting and Corporate Regulatory Authority (ACRA)
Key Information
The Key Information needed for Singapore company incorporation includes:
Company Name:
Must be unique and not identical or similar to existing names.
Can be reserved in advance using ACRA Form 1.
Registered Address:
Must be a physical address in Singapore.
Can be a virtual office address.
Share Capital:
The total amount of money invested by shareholders.
Minimum paid-up capital is SGD 1.
Directors and Shareholders:
At least one director and one shareholder are required.
Shareholders can be individuals or corporations.
Must provide personal details and identification documents.
Business Activities:
A description of the company's main business operations.
Used to determine the appropriate industry code.
Company Constitution:
The company's internal rules and regulations, including:
Company name
Objects of the company
Share capital
Powers of the directors
Rights of the shareholders
Understanding ACRA
Role: The Accounting and Corporate Regulatory Authority (ACRA) is the statutory board tasked with overseeing and regulating companies and businesses in Singapore.
Function:
Company incorporation and registration
Key Accounting and Regulatory Considerations
Company Registration:
Choose a Company Type: Private Limited Company, Public Company, or other options.
Appoint Directors and Company Secretary: Ensure they meet ACRA's requirements.
Register with ACRA: Submit necessary forms and documents online or in person.
Record Keeping:
Maintain accurate and up-to-date records: Financial records, minutes of meetings, register of members, etc.
Retain records for a specified period: As per ACRA's requirements.
Delving Deeper into Setting Up a Local Company in Singapore
Company Registration
Choosing a Company Type: The most common type for foreign investors is a Private Limited Company (Pte Ltd). This offers limited liability and flexibility in terms of ownership and management.
Name Reservation: Your company name must be unique and not misleading. You can reserve a name for 120 days while you complete the registration process.
Appointing Directors and Company Secretary: At least one director must be a resident director. A company secretary must be appointed within six months of incorporation.
Registered Address: Your company must have a registered address in Singapore.
Share Capital: Determine the authorized share capital and the number of shares to be issued.
Company Constitution: This document outlines the rules and regulations governing your company's operations.
Submitting Documents: File the necessary forms and documents with ACRA through the BizFile+ portal.
Choosing a Company Name
Choosing a company name in Singapore is an important first step in setting up your business. Here's a breakdown of the process:
1. Brainstorming and Initial Checks
Reflect your brand: Your name should align with your company's values, mission, and the products or services you offer.
Keep it concise and memorable: A shorter name is easier to recall and use in branding.
Check for availability: Use the ACRA website to see if your desired name is already taken.
Consider variations: Check for similar spellings, pronunciations, and word sequences.
Domain name availability: See if the corresponding domain name is available for your website.
2. ACRA Guidelines
Avoid identical names: Your name cannot be the same as an existing company.
No undesirable words: Obscene, vulgar, or offensive names are prohibited.
Restrictions on certain words: Some words may require additional licenses or approvals (e.g., "bank," "insurance," "academy").
Names similar to government bodies: Avoid names that resemble government organizations or protected entities (e.g., "Temasek").
3. Name Application
Submit via BizFile+: Once you've chosen a name, apply for it through ACRA's online portal.
Pay the fee: There is a small fee for name applications.
Approval and reservation: If approved, your name will be reserved for 120 days, giving you time to complete company incorporation.
4. Important Considerations
Trademark: Registering your company name with ACRA is not the same as trademarking it. If you want exclusive rights to your name, you'll need to apply for a trademark separately.
Domain name registration: Secure your domain name as soon as possible, as it's a separate process from company name registration.
Tips:
Be creative and unique: Choose a name that stands out and reflects your brand.
Get feedback: Ask friends, family, or potential customers for their opinions on your shortlisted names.
Consider your target audience: Think about how your name will be perceived by your customers.
Choosing the right company name is a crucial step. Take your time, do your research, and make sure it aligns with your business goals and brand identity.
Determining the Company Type
There are several types of companies you can choose from in Singapore. Here's a breakdown of the most common ones:
1. Private Limited Company (Pte Ltd)
This is the most common type of company in Singapore.
It has a separate legal identity from its owners (shareholders).
Liability of shareholders is limited to the amount they have invested in the company's shares.
It can have a maximum of 50 shareholders.
Shares are not available to the general public.
2. Exempt Private Company (EPC)
This is a type of private limited company with some exemptions from certain regulatory requirements.
It must have a maximum of 20 shareholders, all of whom are individuals (no corporations).
3. Public Company Limited by Shares
This type of company can have more than 50 shareholders.
It can raise capital from the public by issuing shares.
Shares are traded on the stock exchange.
4. Company Limited by Guarantee
This type of company is usually set up for non-profit purposes, such as charities or social enterprises.
It does not have share capital.
Members guarantee to contribute a certain amount to the company's assets in the event of winding up.
5. Unlimited Company
In this type of company, the liability of the members is unlimited.
This means that members are personally liable for the company's debts.
Here's a table summarizing the key differences:
Feature | Private Limited Company | Exempt Private Company | Public Company Limited by Shares | Company Limited by Guarantee | Unlimited Company |
Legal Identity | Separate | Separate | Separate | Separate | Separate |
Liability | Limited | Limited | Limited | Limited | Unlimited |
Shareholders | Max 50 | Max 20 (individuals only) | Unlimited | - | Unlimited |
Share Capital | Yes | Yes | Yes | No | Yes |
Raising Capital | Private placement | Private placement | Public offering | - | Private placement |
Choosing the right company type
The best type of company for you will depend on your specific business needs and goals. Consider factors such as:
The size of your business: How many shareholders will you have?
Your funding needs: Will you need to raise capital from the public?
Your liability concerns: How much personal liability are you willing to assume?
Your business goals: Is your business for-profit or non-profit?
You can find more information about company types in Singapore on the website of the Accounting and Corporate Regulatory Authority (ACRA):
Appointing Directors, Company Secretary and Other Key Personnel
Setting up a local company in Singapore involves several key steps, including appointing directors, a company secretary, and other key personnel. Here's a breakdown of the process:
1. Appointing Directors:
Requirements:
At least one director must be a Singapore citizen, permanent resident, EntrePass holder, or Employment Pass (EP) holder.
The director must be at least 18 years old, of full legal capacity, and not disqualified from acting as a director (e.g., not an undischarged bankrupt).
Responsibilities:
Directors are responsible for the overall management and strategic direction of the company.
They have a legal duty to act in the best interests of the company, act honestly and in good faith, and exercise due care and diligence.
Appointment:
Directors are typically appointed by the company's shareholders.
Their appointment must be documented in the company's registers and filed with the Accounting and Corporate Regulatory Authority (ACRA).
2. Appointing a Company Secretary:
Requirements:
Every company in Singapore must appoint a company secretary within six months of its incorporation.
The company secretary must be a natural person who is ordinarily resident in Singapore.
The company secretary cannot be the sole director of the company.
Responsibilities:
The company secretary is responsible for ensuring that the company complies with all legal and regulatory requirements.
This includes maintaining company records, preparing and filing annual returns, and organizing meetings of directors and shareholders.
Appointment:
The company secretary is appointed by the company's directors.
Their appointment must be documented in the company's registers and filed with ACRA.
3. Appointing Other Key Personnel:
In addition to directors and the company secretary, companies may also need to appoint other key personnel, such as a chief executive officer (CEO), managing director, or auditor.
The specific requirements for these positions will vary depending on the size and nature of the company.
4. Important Considerations:
ACRA Requirements: All appointments of directors, company secretaries, and other key personnel must be filed with ACRA.
Directors' Training Program: ACRA offers a free online Directors Training Program to help newly appointed directors understand their duties and responsibilities.
By following these steps and seeking professional advice when needed, you can successfully appoint the necessary personnel for your local company in Singapore.
Share Capital
Share capital, also known as paid-up capital, represents the funds that shareholders have invested in a company. It's a crucial aspect of setting up a local company in Singapore. Here's a breakdown of key points:
Minimum Requirement:
The minimum share capital required to start a private limited company in Singapore is S$1. This can be fully paid upfront or issued with partial payment.
Issuance of Shares:
Companies can issue shares to shareholders in exchange for their investment.
Shares can be issued with different rights and privileges, such as voting rights and dividend entitlements.
Payment for Shares:
Shareholders can pay for their shares in cash or in kind (e.g., assets).
The company's constitution outlines the terms and conditions for share issuance and payment.
Increasing Share Capital:
Companies can increase their share capital by issuing new shares to existing or new shareholders.
This often requires approval from the company's board of directors and shareholders.
Maintaining Share Capital Records:
Companies must maintain accurate records of their share capital, including the number of shares issued, the names of shareholders, and the amount paid for each share.
These records are typically kept in the company's register of members.
Key Considerations:
Amount of Share Capital: While the minimum share capital is S$1, companies may choose to start with a higher amount depending on their business needs and financial projections.
Shareholder Agreements: It's common for shareholders to enter into agreements that outline their rights and obligations, including matters related to share ownership and transfer.
Legal and Regulatory Compliance: Companies must comply with the relevant laws and regulations governing share capital, including the Companies Act and the Accounting and Corporate Regulatory Authority (ACRA) guidelines.
Shares and Shareholders
When setting up a local company in Singapore, understanding the role of shares and shareholders is crucial. Here's a breakdown of the key aspects:
Shares
Definition: Shares represent ownership in a company. When you purchase shares, you become a part-owner of the company.
Types: Singapore companies typically issue ordinary shares, which come with voting rights and dividend entitlements. Other types of shares, such as preference shares, may also be issued.
Share Capital: This refers to the total value of shares issued by the company. It's an important indicator of the company's financial strength.
Minimum Requirements: The minimum paid-up share capital for a Singapore company is S$1.
Issuance and Transfer: Shares can be issued to new shareholders or transferred between existing shareholders. These transactions must be documented properly.
Shareholders
Definition: Shareholders are individuals or entities that own shares in a company.
Rights: Shareholders have certain rights, including:
Receiving dividends
Attending and voting at general meetings
Inspecting company records
Participating in the company's profits and assets
Responsibilities: Shareholders also have responsibilities, such as:
Paying for their shares
Adhering to the company's constitution
Acting in the best interests of the company
Liability: Shareholders have limited liability, meaning their personal assets are protected from the company's debts.
Setting Up a Company in Singapore
Minimum Requirements: To set up a private limited company in Singapore, you need at least one shareholder, one director, and one company secretary.
Shareholder Agreements: It's common for shareholders to enter into a shareholder agreement that outlines their rights, responsibilities, and how decisions will be made.
Company Constitution: The company's constitution is a legal document that sets out the rules governing the company, including matters related to shares and shareholders.
Key Considerations
Choosing the Right Share Structure: Consider the different types of shares and how they align with your business objectives.
Drafting a Comprehensive Shareholder Agreement: This agreement should address important issues such as decision-making, transfer of shares, and dispute resolution.
Understanding Regulatory Requirements: Familiarize yourself with the regulations governing shares and shareholders in Singapore's Companies Act.
By understanding the role of shares and shareholders, you can effectively structure your company and ensure a smooth and successful business operation in Singapore.
Registered Office Address
When setting up a local company in Singapore, one of the key requirements is to have a registered office address. This address serves as the official point of contact for the company, where all official communications and notices are sent. It is also the location where the company's registers and records are kept.
Criteria for a Registered Office Address
A registered office address in Singapore must meet the following criteria:
Physical Address: It must be a physical office address located in Singapore. A P.O. box address is not acceptable.
Accessibility: The address must be open and accessible to the public for at least three hours during ordinary business hours on each business day.
Communication: It must be a place where all communications and notices can be addressed.
Choosing a Registered Office Address
There are several options for choosing a registered office address in Singapore:
Home Address: If you are living in Singapore, you can use your home address as the registered office address. However, this may have implications for your privacy, as the address will be publicly available. You will also need to ensure that your business activities comply with the Home Office Scheme guidelines.
Corporate Service Provider: Many companies choose to use the registered office address services offered by corporate service providers. This option provides a professional business address and ensures that all mail is handled efficiently.
Virtual Office: A virtual office provides a prestigious business address and a range of services, such as mail handling and call answering, without the need for a physical office space.
Important Considerations
Privacy: If you use your home address as the registered office address, it will become public information.
Mail Handling: Ensure that you have a system in place for handling mail received at the registered office address, especially important communications from government agencies.
Compliance: The registered office address must comply with all relevant regulations and requirements.
Conclusion
Choosing the right registered office address is an important step in setting up a local company in Singapore. Consider your business needs, privacy concerns, and budget when making this decision.
Deciding on a Financial Year End
Setting a Financial Year End (FYE) is a crucial step when setting up a local company in Singapore. Here's a comprehensive guide to help you make an informed decision:
Understanding Financial Year End (FYE)
The FYE is the last day of your company's 12-month accounting period.
It determines when your company's financial reports are due and influences tax filing deadlines.
You can choose any date as your FYE, it doesn't have to be December 31st.
Factors to Consider When Choosing Your FYE
Business Needs:
Seasonal Business: If your business has peak seasons, you might want to align your FYE with the end of your busy period. This can help with inventory management and financial reporting when activity is lower.
Business Cycle: Consider your company's unique business cycle, including project timelines, contract renewals, and industry fluctuations.
Tax Considerations:
Tax Exemptions: Check if your chosen FYE affects your eligibility for any tax exemptions or incentives.
Tax Filing Deadlines: Be aware of the tax filing deadlines associated with your chosen FYE to avoid penalties.
Administrative Convenience:
Alignment with Parent Company: If you're a subsidiary of a foreign company, aligning your FYE with the parent company can simplify consolidated financial reporting.
Workload Distribution: Consider how your FYE will distribute your company's workload throughout the year, especially for accounting and finance teams.
Common FYE Choices in Singapore
31st March: A popular choice as it aligns with the end of the Singapore government's fiscal year.
30th June: Often chosen by companies in industries with a mid-year peak season.
30th September: Can be suitable for companies with a financial year that starts in the last quarter of the calendar year.
31st December: Aligns with the calendar year and is a common choice for many companies.
Important Points to Remember
First FYE: Your first financial year can be up to 18 months long.
Subsequent FYEs: After the first year, your FYE must be a 12-month period.
Changing FYE: You can change your FYE later, but there are some restrictions and you'll need to notify ACRA.
Key Steps After Setting Your FYE
Inform ACRA: Notify the Accounting and Corporate Regulatory Authority (ACRA) of your company's FYE during the incorporation process.
Plan for Compliance: Mark important deadlines in your calendar, such as the Annual General Meeting (AGM) and annual return filing.
Specific Documents Required for Company Registration in Singapore
When registering a company in Singapore, you'll generally need to submit the following documents to ACRA:
Incorporation Form: This form contains essential details about your company, such as its name, registered address, business activities, and share capital.
Memorandum and Articles of Association (MAA): These documents outline the company's constitution, including its objectives, powers, and internal governance rules.
Identity Documents of Directors and Shareholders: This includes passports, identity cards, and proof of residential address for all directors and shareholders.
Nominee Director (if applicable): If you're appointing a nominee director, you'll need to provide their consent and relevant documentation.
Registered Address Proof: This could be a tenancy agreement or a letter from the building owner confirming the company's registered address.
Payment of Incorporation Fees: The fees vary depending on the company's share capital.
How ACRA Can Assist You
Online Resources: Access a wealth of information, forms, and guides on ACRA's website.
Business Advisory Services: Seek guidance on company incorporation, accounting, and regulatory matters.
eBizFile+ Portal: Submit documents and applications electronically through this online platform.
By understanding ACRA's role and adhering to its requirements, you can ensure your company operates smoothly and complies with Singapore's legal and regulatory framework.
Additional Resources:
Accounting and Corporate Regulatory Authority (ACRA) Website: https://www.acra.gov.sg/how-to-guides/setting-up-a-local-company/choosing-a-company-name
Inland Revenue Authority of Singapore (IRAS) Website: https://www.iras.gov.sg/
Singapore Companies Act: https://sso.agc.gov.sg/
Bestar Asia: https://www.bestar-asia.com/post/singapore-company-name
Bestar Asia: https://www.bestar-asia.com/post/pointers-to-pick-a-company-name
Bestar Asia: https://www.bestar-asia.com/post/register-company-in-singapore
Bestar Asia: https://www.bestar-asia.com/post/duties-and-responsibilities-of-a-company-secretary-in-singapore
Bestar Asia: https://www.bestar-asia.com/post/step-by-step-guide-to-company-registration-in-singapore
How Bestar can Help
Setting Up a Local Company - Accounting and Corporate Regulatory Authority
Bestar plays crucial roles in helping businesses navigate the complexities of setting up and operating in Singapore, including ensuring compliance with the Accounting and Corporate Regulatory Authority (ACRA). Here's how we assist:
ACRA Filings: Bestar helps prepare and file necessary financial statements and returns with ACRA, ensuring compliance with reporting deadlines and requirements.
Financial Reporting Standards (FRS): We ensure the company's financial records adhere to Singapore's FRS, which align with International Financial Reporting Standards (IFRS).
Corporate Tax Compliance: Bestar assists with corporate income tax filings and advise on tax planning and optimization strategies to minimize tax liabilities.
GST Compliance: We help businesses comply with Goods and Services Tax (GST) regulations, including registration, filing returns, and managing input tax credits.
Company Incorporation and Registration: Bestar guides businesses through the company incorporation process, ensuring compliance with ACRA's requirements and drafting necessary documents.
Corporate Governance: We advise on corporate governance best practices, ensuring compliance with ACRA's guidelines and minimizing legal and reputational risks.
Legal Compliance: Bestar ensures compliance with all relevant laws and regulations, including those related to company operations, employment, and intellectual property.
ACRA Filings: Bestar assists with various filings with ACRA, including changes in company particulars, annual returns, and other statutory filings.
Corporate Records: We maintain accurate and up-to-date corporate records, including minutes of meetings, registers of members, and other statutory documents.
Corporate Governance: We advise on corporate governance best practices and ensure compliance with ACRA's guidelines.
Liaison with ACRA: We act as the primary point of contact with ACRA, addressing any inquiries or requests for information.
By engaging Bestar, businesses can:
Ensure Compliance: Minimize the risk of non-compliance with ACRA's regulations and avoid penalties.
Save Time and Resources: Outsource complex tasks, allowing businesses to focus on their core operations.
Gain Expert Advice: Benefit from the in-depth knowledge and experience of professionals in navigating the regulatory landscape.
Mitigate Risks: Identify and mitigate potential legal and financial risks associated with non-compliance.
By working closely with Bestar, businesses can establish a strong foundation for success in Singapore while ensuring compliance with ACRA's requirements.
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