Q. What is the difference between a private limited company and a sole-proprietorship or partnership?

A private limited company is a company which enjoys certain advantages such as (i) separate entity; (ii) limited liability i.e. liability of the company does not extend to its shareholders; (iii) perpetual succession i.e. in death of a member will not affect the continuance of the company and etc.

Q. How many directors and shareholders are required to incorporate a private limited company?

Minimum one director (of whom at least one must be a Singapore resident) and two shareholders.

Shareholders is limited to 50 or less.

Q. Can a sole-proprietorship or partnership be converted to a private limited company?

Yes. The sole-proprietorship or the partnership's business will be taken over by the proposed private limited company. In return, the proposed private limited company will issue shares to the sole-proprietor or the partners.

Q. What is the cost of incorporate a private limited company?

With effect from 15 January 2002, the Registry of Companies has reduced the registration fee payable from $1,290 to $300. However, there are additional cost of $600 chargeable for our services rendered and out of pocket expenses and disbursements.

Q. What is the minimum authorised capital/paid up capital?

The minimum is S$100,000.00/S$2.00 respectively.

Q. How fast can a private limited company be incorporated?

Takes 1 working day (provided the proposed name is approved). Name search is almost immediate.

Q. Can a private limited company issue shares for consideration otherwise than cash?

Yes. The consideration can be any kind, example: assets, equipment, machinery, stocks, services rendered to the company and etc.

Q. Does  the company appoint a company secretary?

Yes. Every company must have at least one secretary appointed within 6 months from the date of incorporation.

Q. Does the company appoint a company auditors?

Yes, every company is still required to appoint an auditor within 3 months from the date of incorporation and at every AGM.

Q. If the company does not carry on business (dormant) during the year, must the company file the audited accounts with the relevant authorities?

No. All dormant companies are exempted from mandatory audit requirements. However, these companies are still required to submit the Annual Return and Certificate by a company limited by shares under Section 197 (1) with effect from the financial year beginning with 15 May 2003.

Q. Does the exempt private company submit audited accounts to the relevant authorities?

No. Exempt private companies are exempted from audit requirements.

However, an Annual Return and Certificate by a company limited by shares under Section 197 (1) need to be submitted with The Registrar together with a declaration of solvency OR a set of unaudited accounts, notes to the accounts and director's report.

A set of unaudited accounts must also be submitted to The Inland Revenue Department.

Q. What is an exempt private company ("EPC")?

An Exempt Private Company is a private company with no corporate shareholders and not more than 20 shareholders. An annual revenue threshold will initially be set at $2.5 million for companies with financial year beginning at 15 May 2003, and will be raised to $5 million after one year.

Q. Do  the private companies hold an annual general ("AGM") every year?

No. Private companies do not need to hold an AGM if all the shareholders are agreeable.