What is a Private Limited Company

April 11, 2012 | By

What is a Private Limited Company in Singapore?

A company is a business entity registered under Chapter 50 of the Companies Act in Singapore. 
 
It has a legal personality i.e. it has rights to own properties, has perpetual succession and can sue or be sued in its own name. 
 
It usually has the words 'Pte Ltd' or 'Ltd' as part of its name. 
 
TYPES OF COMPANIES IN SINGAPORE
 
Different types of businesses necessitate different company setups. Before starting a business or incorporating a company, learn which type of company will work most efficiently for your business.
 
1.  Private Company limited by shares
      A.  Private Company
      This is a locally incorporated company where the maximum number of shareholders is limited to 50.
 
     B.  Exempt Private Company
     This is a private company: 
  • which has not more than 20 shareholders, and none of the shareholders is a corporation or 
  • that is wholly owned by the Government and which the Minister, in national interest, declares by notification in the Gazette to be an exempt private company.
 
2.  Public Company
     A.  Public Company limited by shares
A public company limited by shares is a locally incorporated company in which the number of shareholders can be more than 50. The company may raise capital by offering shares and debentures to the public. A public company must register a prospectus with the Monetary Authority of Singapore before making any public offer of shares and debentures.
 
     B.  Public Company limited by guarantee
A public company limited by guarantee is one which carries out non-profit making activities that have some basis of national or public interest, such as for promoting art, or charity etc. The Minister may approve the registration of the company without the addition of the word “Limited” or “Berhad” to its name. 
 
Exempt Private Companies
 
What is an Exempt Private Company (EPC)?
 
An Exempt Private Company (EPC) is a private company which has at most 20 shareholders. No corporation holds (directly or indirectly) any beneficial interest in the EPC's shares. It can also be a company the Minister has gazetted as an EPC (see section 4(1) of the Companies Act).
Is an EPC required to file Annual Return? 
 
An EPC is required to file Annual Return via BizFile. If the EPC is insolvent (i.e. unable to meet its debts when they fall due), it has to lodge the financial accounts with the Registrar. However, if the EPC is solvent (i.e. able to meet its debts when they fall due), it has to complete an online declaration of solvency instead.
 
Exempt Private Companies need not attach the EPC certificate or the Statement by EPC exempting them from audit requirements (currently in PDF format). The appropriate online declarations will appear in the new Annual Return if the correct company type has been selected earlier.
Professional firms filing on behalf of companies may continue to require the hardcopy certificates from directors as evidence of compliance, and keep these for record purposes, even though ACRA has done away with lodgment of these certificates as an attachment in the new Annual Return. 
What is an audit exemption?
 
Companies that are exempted from audit requirements are not required to have their accounts audited. Instead, they will prepare unaudited accounts for purposes of AGMs and filing with ACRA. If the company chooses to have the accounts audited, it will submit the audited accounts together with the auditor’s report.
 
What types of companies are exempted from audit?
 
The following companies are exempted from audit:
EPC with revenue not more than S$5 million for the financial year starting on or after 1 June 2004; or 
EPC with revenue not more than S$2.5 million for the financial year starting on or after 15 May 2003 but before 1 June 2004; or
Any company, including an EPC, that is dormant for the financial year starting on or after 15 May 2003
 
Can ACRA require the accounts to be audited? 
The Registrar may require the company to submit audited accounts and the auditor’s report, to the Authority, if: 
he believes that there has been a breach of section 199 (relating to accounting records and system of control) and section 201 (relating to the accounts and director’s reports) of the Companies Act; or 
it is otherwise in the public interest to do so.
 
If an EPC company has already filed an Annual Return with ACRA, does it still need to file any documents with IRAS? 
Notwithstanding the filing of Annual Return with ACRA, an EPC company must also file its Income Tax Return (Form C), accounts and tax computation with IRAS annually. 
 
(Source:  ACRA – 05/03/12)
 

 

Share
Name
Email
Phone Number
Comments

Filed in: Uncategorized

Comments are closed.