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Singapore Company Incorporation FAQs

Frequently Asked Questions about Singapore Company Formation

TOP FAQs

  • Who is a resident of Singapore?

    A Singapore citizen, Singapore Permanent Resident or EP holder who is residing in Singapore.

  • What documents are required to incorporate the subsidiary company?

    Typically the following documentation will be required:

    • Details of the proposed subsidiary name, share capital, shareholder(s), director(s) etc.
    • Copy of Singapore ID (where applicable) and passport of each director and individual shareholder
    • Certificate of incorporation of the parent company and company profile reflecting registered address and directors of the parent company.

    * Any documents that are not in English must be officially translated into English.

  • Can a shareholder also be a director?

    Yes, there are no restrictions prohibiting an individual assuming both roles.

  • What is a company?

    A company is a business entity registered under the Companies Act, Chapter 50. Most companies in Singapore are private companies limited by shares and are recognized by the suffix “Pte Ltd”.

  • What is the difference between a director and a shareholder?

    Shareholders
    own the company and are entitled to the profits of the company.

    Directors

    Manage and oversee the company’s operations, and deal with everyday responsibilities.

  • Can a director also be the company secretary?

    A director can hold the position of company secretary only if he or she is qualified to do so, and the company has more than two directors and the director is qualified to do so.

  • What is private company?

    Maximum number of shareholders is limited to 50 and the constitution restricts the right of its members to transfer their shares in the company.

     

    A private company limited by shares can be classified as a exempt private company.

    The key characteristics of an exempt private company is:

    • No more than 20 shareholders; and
    • All the shareholders are individuals.
    • Exempt private companies with an annual revenue of less than S$5 Million are exempted from audit requirements and are not required to file financial statements with the ACRA.

    It is also exempted from prohibitions against loans to its directors or to companies related to its directors.

  • What are the Different Kinds of Companies?
    • Private/public company limited by shares
    • Public Company Limited by Guarantee
  • What is the minimum and maximum amount of shareholders permitted?

    A private company limited by shares must have at least one shareholder and no more than 50 shareholders.

  • Does a Singapore subsidiary require a registered address in Singapore?

    Yes, all Singapore companies and subsidiaries need to have a registered address in Singapore.

Shareholders

What is the Value of a Share?

A share has a nominal value and an actual value (or market value):

 

  • The nominal value is the amount that the shareholder paid for the share.
  • The actual value will vary from the nominal value and depends on the value of the company and market conditions.

Are there different types of shares?

Yes, there are two types of shares:

 

1. Ordinary shares

Most companies only have ordinary shares. These shares entitle the holder:

  • 1 vote per share
  • Equal participation in dividends
  • A share in the surplus capital (if the company is wound-up)

 

2. Preference shares

These shares have preferential rights over ordinary shares, usually in respect to dividends.

e.g., fixed amount of dividends, or alternatively, participating in profits beyond the fixed dividend under a fixed formula.

These shares may also be given priority on in return of capital upon winding-up (but are not entitled to surplus capital).

Preference shares are often non-voting, and are redeemable.

What is a share?

A share is a unit of ownership interest in a company.

What is the difference between a director and a shareholder?

Shareholders
own the company and are entitled to the profits of the company.

Directors

Manage and oversee the company’s operations, and deal with everyday responsibilities.

Who can be a shareholder?

Anyone can be a shareholder, including another company, which is called a corporate shareholder.

What is a shareholder?

A shareholder is an owner of a company limited by shares.

If there is more than one shareholder, each shareholder owns a representative portion of the company.

Shareholders are entitled to receive their portion of the company’s profits.

Does a director have to be a shareholder and vice versa?

No, directors are permitted, but not required to own shares in the company. Likewise, a shareholder is permitted, but not required to be a director.

What is the minimum and maximum amount of shareholders permitted?

A private company limited by shares must have at least one shareholder and no more than 50 shareholders.

Can a shareholder also be a director?

Yes, there are no restrictions prohibiting an individual assuming both roles.

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