What is the main source of law authorising this entity form?

Companies Act 1967 (the Companies Act).

Give a brief summary of this entity form, including

Does the entity possess separate legal personality?

Yes, it has its own legal personality, separate from its directors and shareholders. It can acquire assets, go into debt, enter into contracts, and sue or be sued in its own name.

(Maximum) period of existence

It has no maximum period. It has perpetual succession – continues notwithstanding a change in structure of shareholdings or death of any of its shareholders.

Governing document(s)

Constitution.

Liability of incorporators / shareholders

The liability of the shareholders is limited to the capital that they have paid into the company. If any amount of share capital is unpaid, the shareholder remains liable for such share capital and their rights to vote and receive dividends may be limited by the extent of the paid-up shares.

(Governing) bodies

The Accounting and Corporate Regulatory Authority (ACRA).

Other particularities

No other particulars of note.

Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions, equity acquisitions, etc.)?

There are no specific restrictions under the Companies Act on the use of the company for international transactions and restructuring. In fact, this form of entity is commonly used as an investment holding vehicle for foreign investors to invest into operating businesses and entities outside of Singapore or as a joint-venture company for cross-border transactions. It is also commonly used as an investment vehicle for start-ups and businesses involved in early-stage fundraising.

Can this type of entity be publicly listed or held?

The Private Limited Company can be converted into a public company by lodging with the Registrar a copy of a special resolution, a statement in lieu of prospectus and a declaration in a prescribed form. As the Companies Act prescribes, the maximum shareholders for a private company to be fifty (50), a private company will have to convert to a public company when the number of shareholders exceeds fifty (50). Conversely, a public company may also convert to a private company by lodging with the Registrar a special resolution, a list of persons holding shares in the company and other information relating to the company or its members and officers as may be prescribed.

Can this type of entity be used for a non-profit or charitable organization?

Yes, but in Singapore, non-profit entities are typically registered as a Company Limited by Guarantee, a Society under the Registry of Societies, or a Charitable Trust.

Give a brief summary of the process of incorporation, formation, or organization, including

Main documents required

A signed consent to act (Form 45) from each director, a signed consent to act by company secretary (Form 45B), relevant directors declarations, company constitution (either by selecting from the model constitution on ACRA website or uploading a customised constitution), identification and proof of residential address for all officers and shareholders of the company. Know-your-client due diligence completed by incorporation service provider for anti-money laundering regulations. The last day of the proposed company’s first financial year and its registered office address also have to be provided.

Involvement of notary, company register, governmental authorities

The company has to submit its company name for approval. After the name is approved, the incorporator has to submit the necessary documents to ACRA for approval.

Timing (estimate)

The application for the proposed name of the company to be incorporated is usually processed fifteen (15)-minutes after the name application fee is paid. It may take fourteen (14) to sixty (60) days if the company is in a special field which requires special licenses or has to be referred to another agency for review, such as setting up of private school or to provide financial services.

Main costs, including registration and similar fees (excluding legal fees)

The Registrar prescribed fees are: (i) the company name application fee of S$15 and (ii) the registration fee of S$300.

Is a description of the cxzanticipated business or purpose of the entity required for incorporation, formation or organization?

When registering the company with ACRA, the incorporator will be asked to fill in the company’s primary and secondary activity which is selected from the Singapore Standard Industrial Classification code.

Minimum number of incorporators / shareholders and residency requirements

Minimum is one (1) shareholder. Shareholders can either be a natural person or a corporate entity.

Generally, shareholders do not have to meet any residency requirements, except in limited circumstances.

Minimum number of directors (or other applicable officers) and residency requirements

At least one (1) director who is ordinarily resident in Singapore.

At least one (1) company secretary who is a natural person and has his or her principal or only place of residence in Singapore.

Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

The minimum share capital is S$1.

The requirement for opening of a corporate bank account differs from bank to bank and is subject to such laws and regulations applicable to the bank, including but not limited to anti-money laundering laws and know-your-client requirements.

Is the physical presence of incorporators / directors required in the jurisdiction for incorporation, formation or organization?

A physical Singapore registered office address is required.

The company needs to have at least one (1) director who is ordinarily resident in Singapore and a company secretary who is a natural person and has his or her principal or only place of residence in Singapore. The company secretary must be appointed (to appoint secretary within six (6) months of incorporation.

Is a tax identification number, or equivalent, required? If so, how is it obtained?

It is the Unique Entity Number (UEN). It is assigned by ACRA upon incorporation.

What is the title of the applicable company registry?

ACRA – a governmental body and regulates business registration, financial reporting, public accountants, and corporate service providers.

What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.: Articles, Ownership identification (direct and/or indirect ownership, 'beneficial owners'), Group structure, Share capital, Directors , Accounts, Insolvency, good-standing, liquidation, Liens and encumbrances on the shares, Liens and encumbrances on assets of the entity, Other (e.g. litigation, tax matters)

Constitution. This is available on the ACRA website for purchase by the public.

Electronic Register of Members. This shows the direct shareholding of the company. It is available for purchase by the public. In addition, unless exempted:

• to lodge a Register of Registrable Controllers (RORC) (Registrable Controllers are also commonly known as beneficial owners). Information in the ACRA’s central RORC will only be made available to law enforcement agencies for the purpose of administering or enforcing the laws under their purview (e.g. investigation of money laundering offences). The public will not have access to the information in the ACRA central RORC.; and
• from 4 October 2022, to keep and maintain a Register of Nominee Shareholders containing the particulars of the nominators of the company’s nominee shareholders. The register and the information therein may only be disclosed to ACRA or other public agencies upon their request for the purpose of administering or enforcing any written law. The company must not disclose the register or the information therein to any member of the public.

ACRA business profile will show the holding company. It is available on the ACRA website for purchase by the public.

Required for ACRA. This will be shown in the ACRA business profile of the company (refer to above).

Register of Directors, This is available on the ACRA website for purchase by the public.

Register of Auditors, This is available on the ACRA website for purchase by the public.

Register of Charges (within thirthy (30) days after creation of the charge). It is not available for purchase by the public online. A copy will be kept at the registered office of the company and will be open to inspection to any creditor or member of the company without fee, and to other persons for a small fee fixed by the company. Only the certificate confirming registration of charge would be available for purchase on the ACRA website.

Register of Charges (refer to above).

Other filings include the Register of Secretaries (and Annual Returns. Both are available on the ACRA website for purchase by the public

What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

Board of Directors: Manage, direct, and supervise the business of the company.

Shareholders (refer to Question 20 for their duties, tasks, and responsibilities).

How are the members of the executive body appointed, dismissed and replaced?

Directors are appointed by ordinary resolution passed at a general meeting unless the constitution provides otherwise. The Companies Act only prescribes for removal of directors of public company to be done by ordinary resolution. Therefore, for Private Limited Companies, there is no Companies Act requirement and it will be based on their constitution. Notice of any new appointment or removal of directors by the company has to be provided to ACRA within fourteen (14) days from the date of appointment or removal.

Is it possible to appoint corporate directors or must all directors be natural persons?

An entity cannot be appointed as a director. A director must be a natural person who has attained age of 18 and has full legal capacity.

Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

There is no requirement for non-executive directors to be appointed for private companies. Typically, Singapore companies operate on a single tiered structure with the Board of Directors being the body that governs and manages the business and affairs of the company. However, the responsibilities of the board may be delegated to committees constituted by certain members of the board and/or to other officers performing an executive, supervisory or managerial function.

What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

They are generally referred to as shareholders, subscribers or members of the company.

Shareholders pay for their shares which contributes to the capital of the company. They may also participate in emergency fundraising events.

Attend Annual General Meetings (AGM) and Extraordinary General Meetings.

Approve recommendation for the declaration of dividends at AGM.

Vote on matters including: the appointment and removal of directors, amendments to constitution, issuance of new shares and shareholders’ reserved matters.

Right to receive dividends and assets on winding up of company.

Police wrongdoings, such as pursuing a derivative action.

What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

The default position for the company’s quorum under the Model Constitution prescribed by the Companies (Model Constitutions) Regulations 2015 is two (2) members. However, this can be amended by the company’s constitution to provide otherwise, or the incorporators may choose to adopt a constitution other than the Model Constitution. If the company has only one (1) member, then it may pass a resolution by the member recording the resolution and signing the record.

The requirement to pass ordinary resolutions is a simple majority (i.e. more than 50% or a greater majority if so required by the company’s constitution) of the total voting rights of all the members who on that date would have the right to vote on that resolution and present (in person or by way of proxy, if proxies are allowed) at the meeting (with the requisite notice requirements for such meeting being met), The requirement to pass special resolutions is at least 75% (or a greater majority if so required by the company’s constitution) of the total voting rights of all the members who on that date would have the right to vote on that resolution and present (in person or by way of proxy, if proxies are allowed) at the meeting (with the requisite notice requirements for such meeting being met).

Resolutions by written means: The requirement to pass ordinary resolutions by written means is a majority (i.e. more than 50% or a greater majority if so required by the company’s constitution) of the total voting rights of all the members who on that date would have the right to vote on that resolution, while the requirement to pass special resolutions by written means is at least 75% (or a greater majority if so required by the company’s constitution) of the total voting rights of all the members who on that date would have the right to vote on that resolution.

Any variation of the quorum requirements and which involves the amendment of the company’s constitution would have to be approved by way of special resolution.

Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

It is possible for the company to be subject to certain governance or licensing regimes or requirements other than the Companies Act, depending on the matter it proposes to carry out and its business (not exhaustive).

What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

The company must keep accounting records that will sufficiently explain the transactions and financial position of the company and enable such statements to be prepared from time to time and cause them to be conveniently and properly audited. Such records have to be retained for not less than five (5) years from the end of the financial year.

The financial statements (including profit and loss account, balance sheet and consolidated accounts) have to be approved at the AGM for the respective financial year.

The directors of the company have to appoint an accounting entity(s) to be auditor(s) of the company within three (3) months after incorporation of the company (subject to exceptions elaborated in Question 25). The auditor must be a public accountant or an accounting firm registered with ACRA.

The company has to file an annual return with the Registrar after its AGM seven (7) months after end of its financial year (and eight (8) months for companies that have a share capital and branch register outside Singapore). The annual return is an electronic form to be filed with ACRA containing important particulars of the company such as name of directors, secretary, members, and date to which the financial statements are made up to.

Is the entity permitted to determine its own financial year?

Yes, the company can furnish ACRA with the company’s proposed financial year. The first financial year of the company typically begins on the day of the company’s incorporation until the end of the proposed financial year.

Is the entity subject to any statutory (external) auditor obligations?

Under the Companies Act, a company incorporated in Singapore is required to appoint an auditor within three (3) months from the date of incorporation unless it is exempt from audit requirements. The Companies Act provides that the company is exempted from audit requirements for a financial year if it qualifies as a “small company” for such financial year. To qualify as a “small company”, the company has to be a private company throughout the financial year and satisfies two (2) out of the following three (3) criteria for each of the immediately preceding two (2) consecutive financial years –

• revenue for each financial year does not exceed S$10,000,000;
• value of total assets at the end of each financial year does not exceed S$10,000,000; and
• it has at the end of each financial year not more than 50 employees.

Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

Secretary (refer to Question 10): Ensure all statutory obligations are met and good corporate governance is practiced. It should also be noted that where the company only has a sole director, the sole director cannot be the secretary.

Auditor (refer to Questions 23 and 25): Report on the company’s financial statements.

What is the title designated for ‘ownership interests' (e.g. shares, quota, interests, membership)?

Shares and stock units (less commonly used).

Are different classes of ownership interests possible? If so, what are some examples of different classes?

Yes – typically, ordinary shares and preference shares. Ordinary and preference shares may sometimes be further split into different classes or series, with different rights prescribed to each class or series. Generally, compared to ordinary shares, preference shares may entitle holders to a priority in payment of capital and dividend.

Companies may also have treasury shares. When the ordinary shares or stocks are purchased or acquired by a company, they may hold or deal with them as treasury shares.

What documentation is required for the transfer of ownership interests?

Directors’ resolution.

Share transfer form(s).

Stamp duty working sheets in relation to the payment of applicable stamp duty.

ACRA filing/notice of transfer.

Pre-emption waiver (if required by the constitution,shareholders agreement or other agreements).

Cancellation of old share certificate(s) and issuance of new share certificate(s).

Register transfer in register of members and register of transfers.

Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

Payment of stamp duty to be effected, after which, a stamp duty certificate will be issued.

Are there any applicable stamp duties imposed when transferring ownership interests?

Yes, the amount of stamp duty may be calculated using the Inland Revenue Authority of Singapore (IRAS) online stamp duty calculator.

How are shares issued? (including information on payment obligations, registration requirements)

Pre-emption waiver (if required under the constitution and/or shareholders’ agreement).

Directors’ resolution.

Shareholders’ resolution under Section 161 of the Companies Act.

Subscription agreement/letter.

Filing the return of allotment of shares with ACRA.

Issuance of new share certificate(s).

Registration of allotment in register of members and register of allotments.

Further information on equity contributions, e.g. , Non-cash payments on shares; (Share premium) contributions without issuance of shares , Can partially paid shares/ownership interests permitted and what are the restrictions on them?

Yes, in kind payments are acceptable, such as a share swap. They are usually based on an agreed valuation.

No, the concept of par value of shares has been abolished in Singapore since 2005.

Yes, shareholders have to pay for the unpaid shares when they are called. The constitution usually also provides that shareholders cannot vote and receive dividends on the unpaid portions, and that there will be a lien on the unpaid shares.

Any requirements with respect to share cancellation, share repurchase and other capital reductions

Any cancellation and repurchase of ownership interests must be effected in accordance with the Companies Act and these typically would be effected by way of share buyback and capital reduction. A company may effect a share buyback if it is expressly permitted to do so by its constitution. The total number of ordinary shares and stocks, as well as non-redeemable preference shares in any class that may be repurchased by the company cannot exceed 20% of the total shares in the respective class in the relevant period, save for certain exceptions. There are however no limits on the number of redeemable preference shares that may be repurchased by the company.

By way of special resolution, have to meet solvency requirements and other publicity requirements prescribed by the Minister. However, the company need not meet solvency requirements if reduction does not involve reduction or distribution of cash or assets by the company or release of liability owed to the company.

Any requirements with respect to distributions to shareholders?

Dividends must be distributed from profits only.

Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

Yes.

Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

One-time name application and registration fee: S$315 (refer to Question 8).

Annual filing fee: S$60.

Lodgement of notice of error (when there are errors in filings): S$60.

Registration of particulars relating to charges: S$60.

Application for extension of time to file accounts or hold AGM: S$200.

What are the general corporate tax rates? (Specify if there is a national versus local distinction).

Generally, the corporate tax rate is 17% on its chargeable income, subject to corporate income tax rebate. The tax rate has no national versus local distinction.

Summary of any specific matters, e.g. recent or prospective major legal developments

None.