As stated by the World Bank in 2010, Singapore is the country that’s best for business conduct. Almost a decade has passed, and the country only gets better with its business-friendly laws and tax regulations. A lot of people every day try to compete in business. And not the only local entrepreneur, but foreigners also try to conquer the country’s tough competition by doing company formation and starting their business.
If you are going to start a business in Singapore, the first steps may seem difficult, although company registration in Singapore like the one provided by A1 Corporation in actuality is quite simple and straightforward. For instance, there are a number of business types people can establish in Singapore. In general, there are mainly two types of business entities that can be incorporated in Singapore; Sole Proprietorship and Partnership. To understand more about each business entity you before you go through the process of company registration, read further below.
1. Sole Proprietorship
A Sole Proprietorship type of business is one of the easiest one an entrepreneur can establish in Singapore. It’s just they must be aware of the existing risks that come with the choice. It is rather more risky than the other type of business because by owning a Sole Proprietorship company, you and your company is viewed as the same entity. Thus, you own all the assets and liabilities of the business. There is no protection of personal assets from the risks in doing business as well as the liabilities. In case that your business cannot pay for its liabilities, your personal asset as the owner of the company will be compromised. You are personally responsible for everything and it may cause you great damage. If you are inexperienced, this type of business may be too risky for you and might should be avoided.
A Partnership type of company is owned by at least two people. A Partnership business entity is divided into three types of Partnership as follows:
3. General Partnership
A general partnership has a requirement that must be fulfilled, where the business must be owned by two person minimum and a maximum of twenty people. The partners of the business must pay their taxes as personal income tax corresponding to the shared income from the partnership. The risks of a general partnership are similar to sole proprietorships. All owners or partners of the business are personally responsible for the liabilities and debts of the company. They are also responsible for the actions of other partners.
4. Limited Partnership
A limited partnership is a business where there is an addition of a limited partner to a general partnership. This additional partner’s liabilities are limited to how much they invest in the partnership. This additional partner is prohibited from participating in business management.
5. Limited Liability Partnership
A limited liability partnership type of business combines several features of the previous business entities that have been explained above. In this business, the owners are facilitated with the versatility of a partner in the business. But in addition, they are allowed to enjoy the benefits of a corporate body such as a limited company. There is a minimum requirement of two people owning a limited liability partnership. This type of business requires more experience in the business.