Understanding Business Structure

All Business structures must be registered with the Accounting and Corporate Regulatory Authority (ACRA)

Company

  • It is a legal entity
  • Profits are taxed at corporate tax rates
  • The owner of the Company are called shareholders. There must be a minimum of one share owned by on shareholder
  • A shareholder is not liable for any debts and obligations beyond his agreed share capital invested in the Company
  • Most companies in Singapore are Private Limited (“Pte Ltd”) – up to 50 owners

Sole-proprietorship and Partnership

  • It is not a legal entity
  • The owner / each partner is personnally accountable for all risks, debts and losses
  • Profits form part of owner / each partner’s personal income and are taxed at personal income tax rates

Limited Liability Partnership (LLP)

  • It is a legal entity
  • The personal assets of the partners are protected and owners are not personally accountable for the wrongful acts of other owners
  • An individual’s income from the LLP will be taxed at personal income

 Limited Partnership (LP)

  • It is not a legal entity
  • It consists of at least one general partner and at least one limited partner
  • A general partner has unlimited personal liability and can be appointed as the manager of th LP
  • A limited partner is not liable for any debts and obligations beyond his agreed investment in the LP
  • If the limited partner takes part in the management of the LP, he will have unlimited liability as if he were a geberal partner
  • An individual’s income from the LP will be taxed at personal income tax rate