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You are here: Home / Blog / Setting Structure: Comparing Business Structures in Singapore

Setting Structure: Comparing Business Structures in Singapore

November 2, 2022 IN Blog

Setting Structure: Comparing Business Structures in Singapore

In this article

  1. What Are the 4 Types of Business Structures in Singapore?
  2. What is a Sole Proprietorship?
  3. What is the Legal Status of a Sole Proprietorship?
  4. How to Register a Sole Proprietorship
    1. Can Foreigners Set Up a Sole Proprietorship?
    2. How Much Does it Cost to Register a Sole Proprietorship?
  5. What is a Limited Partnership (LP)?
  6. What is the Legal Status of a Limited Partnership?
  7. How to Register a Limited Partnership
    1. Can Foreigners Register a Limited Partnership?
    2. How Much Does it Cost to Register a Limited Partnership?
  8. What is a Limited Liability Partnership (LLP)?
  9. What is the Legal Status of a Limited Liability Partnership?
  10. How to Register a Limited Liability Partnership
    1. Can Foreigners Register a Limited Liability Partnership?
    2. How Much Does it Cost to Register a Limited Liability Partnership?
  11. What is a Company?
  12. What is the Legal Status of a Local Company?
  13. How to Register a Local Company?
    1. Can Foreigners Register a Local Company in Singapore?
    2. How Much Does it Cost to Register a Local Company?
  14. A Table Comparison of the 4 Main Company Structures
  15. Secure Your Company Set Up With SCI

Comparing Business Structures in Singapore

Thinking of starting a company in Singapore?

While the green city-state is one of the easiest place to start a business worldwide, the process may be confusing if you’re new to it.

If you’ve already decided on your product or service to sell, the next step is to consider the business structure. Don’t confuse it with business types – they are distinct from each other – as you’ll find out below.

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What Are the 4 Types of Business Structures in Singapore?

There are 4 main business structures in Singapore:

  1. Sole Proprietorship
  2. Limited Liability Partnership
  3. Limited Partnership
  4. Company

Look at the different business structures, what they mean, and how they are registered to determine your best option.

Related Read: Determining Your Singapore Business’ Shareholder Structure »


What is a Sole Proprietorship?

It refers to a business managed and controlled by a single person, a limited liability partnership, or a company. There are no partners in a sole proprietorship.


What is the Legal Status of a Sole Proprietorship?

Here is the legal status of a sole proprietorship:

  • It retains the same legal entity as its owner
  • Its business owner is liable for all debts and losses incurred by the business
  • It can sue others or be sued in its owner’s name

How to Register a Sole Proprietorship

You can either submit your online application via BizFile yourself or hire a corporate service provider to do it on your behalf.

Registrations are typically approved after 15 minutes after payment of the registration fee.

Can Foreigners Set Up a Sole Proprietorship?

A foreigner staying overseas who wishes to register a sole proprietorship must meet these guidelines:

  • Designate at least 1 local resident representative who is a Singapore citizen, PR, EntrePass or Employment Pass holder
  • Engage a registered filing agent, like a corporate secretarial company, to submit the registration application through BizFile

After registering the sole proprietorship, they must obtain approval from the Ministry of Manpower (MOM) if they intend to be physically in Singapore to oversee business operations.

Related Read: 2022 Foreigner’s Guide to Registering a Singapore Company »

How Much Does it Cost to Register a Sole Proprietorship?

Here are the costs of registering a sole proprietorship in Singapore:

  • Name application fee: S$15
  • Registration fee: S$100
  • Renewal fee: S$30

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What is a Limited Partnership (LP)?

An LP is a vehicle used for doing business in Singapore. It is a partnership of at least 2 partners, with at least 1 limited and 1 general partner.

There is no need to engage a local manager unless the general partners stay outside of Singapore.


What is the Legal Status of a Limited Partnership?

The legal status of a LP is:

  • It is not of a separate legal entity from the partners
  • It cannot be sued, sue, or own property under its own name
  • The general partner of the LP is responsible for its actions and must take on all debts and obligations incurred
  • The limited partner has no linked liabilities to the LP if they do not partake in management duties

The limited partnership registration may be suspended if no limited partner is registered with the Accounting and Corporate Regulatory Authority (ACRA).

Registration will only be restored after a new limited partner is registered.


How to Register a Limited Partnership

You must submit your application online through BizFile either way:

  1. Doing it yourself by logging in to BizFile
  2. Appointing a registered filing agent to help you submit the online application

Applications are usually processed within 15 minutes after the payment of the name application fee is completed.

Can Foreigners Register a Limited Partnership?

A foreigner can set up a limited partnership in Singapore after appointing a local resident manager.

How Much Does it Cost to Register a Limited Partnership?

Here are the costs of registering an LP:

  • Name application fee: S$15
  • 1-year registration fee: S$100
  • 3-year registration fee: S$160

What is a Limited Liability Partnership (LLP)?

A limited liability partnership offers its owners the added flexibility of functioning as a partnership with a distinct legal identity similar to a private limited company.

An LLP must keep accounting records, balance sheets, and P&L accounts that adequately explain its financial position and transactions.

It must also submit a yearly declaration of solvency or insolvency to the Registrar that will be available to the public.

Related Read: How to Set Up an Offshore Company in Singapore »


What is the Legal Status of a Limited Liability Partnership?

The legal status of a LLP is:

  • It has a separate legal identity from its partners
  • It is regarded as a body corporate with its own legal rights and responsibilities
  • It has perpetual succession, so any change in partners will not affect its rights, abilities, or existence
  • It can sue or be sued in its name
  • It can obtain or manage property in its name
  • It can have a common seal in its name
  • It can perform other activities in its name
  • Its partners will not be held liable for business debts incurred, but may be liable for claims for losses that result from their own erroneous act

How to Register a Limited Liability Partnership

Registering an LLP can be easy when you engage a corporate services provider to help. Otherwise, you may submit the application yourself online through BizFile.

Can Foreigners Register a Limited Liabiliy Partnership?

Are you a foreigner residing outside of Singapore? You can register your LLP after choosing a local resident manager and continue to stay overseas.

How Much Does it Cost to Register a Limited Liability Partnership?

Here are the costs of registering a limited liability partnership in Singapore:

  • Name application fee: S$15
  • Registration fee: S$100
  • Total cost: S$115

What is a Company?

You can choose from 7 different company types to incorporate in Singapore. They are:

  1. Public company limited by guarantee
  2. Public company limited by shares
  3. Public company limited by guarantee
  4. Unlimited private company
  5. Unlimited exempt private company
  6. Unlimited public company
  7. Exempt private company

Setting up a local company has more requirements compared to the other company structures. For example, you need to appoint company officers, like a director, company secretary, and more.

Related Read: A Guide to the Variable Capital Company (VCC) in Singapore »

You also have obligations like maintaining a company register of people in specific roles, as well as other statutory obligations.


What is the Legal Status of a Local Company?

A local company in Singapore is regarded as separate from its owners and operators, including its shareholders and directors.

Therefore, it can:

  • Obtain property in its name
  • Go into contracts with its stakeholders and other third parties
  • Sue others and be sued in its name
  • Be liable for its debts and liabilities
  • Accumulate profits in its name and be taxed for those profits
  • Have perpetual succession

How to Register a Local Company

You can submit your company registration application online on BizFile using your Singpass. 

You can also choose from 2 options – to apply for your business name and incorporate the business in one application or separate them in 2 steps.

If you apply for your company name and incorporate it separately, here is how the process usually goes:

  1. You must provide the transaction number of the name approval application before incorporating it
  2. After the incorporation application is approved, the appointed officers will receive an email asking for their endorsement
  3. Appointed officers must endorse their appointments within 60 days to avoid lapse

Can Foreigners Register a Local Company in Singapore?

If you are a foreigner and want to begin and run a business here, you can submit an application for an EntrePass from MOM if you are eligible.

You must do it before incorporating your company or within 6 months of incorporation.

How Much Does it Cost to Register a Local Company?

Here are the costs of registering a local company in Singapore:

  • Name application fee: S$15
  • Registration fee: S$300
  • Total cost: S$315

A Table Comparison of the 4 Main Singapore Company Structures

Sole Proprietorship Limited Partnership Limited Liability Partnership Company
Control Only 1 owner At least 2 partners At least 2 partners According to the constitution that manages its governance
Legal Status Same legal entity as its owner Same legal entity as its partners Separate legal identity from its partners Separate legal entity
Foreigner Registration Yes Yes Yes Yes
Total Registration Costs S$115 S$115-S$175 S$115 S$315

Secure Your Company Set Up With SCI

Which company structure is best suited for you?

Select the right structure with our advisory help, get it incorporate with our experts, and manage all other business functions with our tailored corporate solutions.

Look forward to a smooth business set up with SCI today!

Related Read: 8 Things to Do After Incorporation of Your Singapore Company »

FAQs

How do I choose my business structure?

Your choice should mainly depend on whether you wish to have full company control, and whether you wish to have the same or separate legal status from the business.

Should I register my business myself or get help?

While you can opt to do it yourself, we recommend seeking a corporate service provider’s help to ensure a smooth process.

What is the best business entity to incorporate?

Generally, setting up a private limited company, which is a type of LLC, is the best choice for the long term.

Start a Singapore business

Decided on the business structure for your company in Singapore? Get started on the incorporation process now!

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Suggested Readings

Various Business Entities in Singapore Which of These Singapore Business Structures Would Work Best For You? how to start a busines in 10 daysHow to Start a Business in 10 Days Default ThumbnailSetting up a Hong Kong business in Singapore
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