Choice of your business structure:
When considering establishing a business in Singapore, it is essential to select the most suitable business structure that aligns with your objectives and requirements. There are various options to choose from, each with its unique set of advantages and drawbacks. The primary business structures include Sole Proprietorship, Partnership, Limited Partnership (LP), Limited Liability Partnership (LLP), Private Limited Company (Pte Ltd), Public Limited Company (Ltd), and Branch Office. Evaluating the right structure involves considering factors such as the size and nature of the business, the number of owners, liability concerns, and tax implications. Ultimately, your choice will play a critical role in determining the success and growth potential of your business.
Sole Proprietorship
A sole proprietorship structure grants the owner full control and responsibility for all business activities. The proprietorship is not a separate legal entity, and the owner is personally liable for the business’s debts and obligations.
Partnership
A partnership is a business structure involving two or more individuals collaborating to operate a business. The partners share the profits and losses, and they are jointly liable for the partnership’s debts and obligations.
Limited Partnership
An Limited Partnership is a business structure that has both general partners, who are personally liable for the debts and losses of the business, and limited partners, who are only liable for the amount of their investment in the business.
Limited Liability Partnership (LLP)
An LLP is a hybrid business structure that merges the benefits of both partnership and company structures, providing partners with limited liability protection, ensuring their personal assets are not at risk from business debts and obligations.
Private Limited Company (Pte Ltd)
A Pte Ltd is a distinct legal entity from its owners, meaning it can own assets, enter contracts, and sue or be sued in its name. Shareholders have limited liability protection, and the company’s management is separate from the shareholders.
Public Limited Company (Ltd)
A Ltd is a separate legal entity owned by shareholders, with shares publicly traded on a stock exchange. A Public Limited Company has increased regulatory requirements and is typically better suited for larger businesses.
Branch office
A branch office is a registered office of a foreign company in Singapore. The foreign company bears full responsibility for the branch office’s debts and losses.
Not Sure?
Each business structure has its pros and cons, with the choice of structure depending on factors such as business size and nature, the number of owners, liability concerns, and tax implications. For further information or assistance, please feel free to contact our expert team.
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