{"id":1385,"date":"2019-08-30T15:38:43","date_gmt":"2019-08-30T07:38:43","guid":{"rendered":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/timcole.com.sg\/?page_id=1385"},"modified":"2019-09-11T12:17:04","modified_gmt":"2019-09-11T04:17:04","slug":"private-limited-company","status":"publish","type":"page","link":"https:\/\/glutenfreepleasure.com\/__proxy_domain\/timcole.com.sg\/private-limited-company\/","title":{"rendered":"Private Limited Company"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”1123″ img_size=”full” alignment=”center”][vc_custom_heading text=”Private Limited Company” font_container=”tag:h1|font_size:36|text_align:left|line_height:1.3″ use_theme_fonts=”yes”]

<\/div>[vc_column_text]When setting up a business enterprise in Singapore, it is imperative that you chose an entrepreneurial vehicle that will help you achieve your long term objectives. Thus, the corporate structure of the business you choose is vital. It determines how quickly you can grow your business to the next level.[\/vc_column_text]
<\/div>[\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”What is a Private Limited Company?” font_container=”tag:h2|font_size:24|text_align:left|line_height:1.3″ google_fonts=”font_family:Lato%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C700%2C700italic%2C900%2C900italic|font_style:700%20bold%20regular%3A700%3Anormal”]
<\/div>[vc_column_text]A private limited company in Singapore is a limited liability entity whose shares are held by a maximum of 50 people. The shares of such a company should not be available to the general public to buy.<\/p>\n

Such businesses must have the abbreviations Pte Ltd at the end of their name. The law allows corporates and\/or individuals to own shares in the limited liability company.<\/p>\n

If you own shares in such a company, the limited liability clause protects you from being liable for debts incurred by the company beyond the number of shares you hold.[\/vc_column_text]

<\/div>[\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Benefits of a Private Limited Company” font_container=”tag:h2|font_size:24|text_align:left|line_height:1.3″ google_fonts=”font_family:Lato%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C700%2C700italic%2C900%2C900italic|font_style:700%20bold%20regular%3A700%3Anormal”]
<\/div>[vc_custom_heading text=”Limited Liability” font_container=”tag:h3|font_size:18|text_align:left|line_height:1.3″ google_fonts=”font_family:Lato%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”][vc_column_text]Limited liability implies that the liability of the shareholders is only limited to the amount of capital they contributed.<\/p>\n

In cases where the business is unable to pay its debts, the liability of the shareholders cannot be extended beyond the amount of money they contributed as capital.[\/vc_column_text][vc_custom_heading text=”Perpetual Succession” font_container=”tag:h3|font_size:18|text_align:left|line_height:1.3″ google_fonts=”font_family:Lato%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”][vc_column_text]The existence of a private limited company is not dependent on the life and survival of its shareholders. Ownership of shares can be transferred to any other party at their wills.<\/p>\n

This ensures that the company will thrive and continue to transact business even when a director or a shareholder resigns, dies, or is declared insolvency.[\/vc_column_text][vc_custom_heading text=”Raising Capital” font_container=”tag:h3|font_size:18|text_align:left|line_height:1.3″ google_fonts=”font_family:Lato%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”][vc_column_text]It is easier for a private limited company to raise money for its day to day operations or any other purpose.<\/p>\n

All the company needs to do is to bring in a new shareholder if the existing number of shareholders is less than 50. Alternatively, the company could issue more shares to the current shareholders. Note that it is easier for a private limited company to attract new shareholders because of it’s limited liability clause. The clause separates personal assets from business assets.<\/p>\n

Banks are also more willing to loan money to a limited liability company because they can quickly recover the money lent by attaching the assets of the company.[\/vc_column_text][vc_custom_heading text=”Credible Image” font_container=”tag:h3|font_size:18|text_align:left|line_height:1.3″ google_fonts=”font_family:Lato%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”][vc_column_text]This entity gives a credible image as compared to partnerships<\/a> and sole proprietorship<\/a>.<\/p>\n

Thus, it stands a better chance in attracting more investors and raising money for expansion. Also, potential clients, professionals, bankers, and suppliers are likely to take the business seriously.[\/vc_column_text][vc_custom_heading text=”Ownership Transfer” font_container=”tag:h3|font_size:18|text_align:left|line_height:1.3″ google_fonts=”font_family:Lato%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”][vc_column_text]It is much easier to transfer ownership of a private limited company to another person without disrupting the operations of the business.<\/p>\n

The transfer could be partially or fully. There is also no complex legal documentation to be pursued.<\/p>\n

The business can accomplish this by issuing additional shares to the existing shareholders or inviting new shareholders into the business.[\/vc_column_text][vc_custom_heading text=”Tax Incentives” font_container=”tag:h3|font_size:18|text_align:left|line_height:1.3″ google_fonts=”font_family:Lato%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”][vc_column_text]The tax rate in Singapore favors private limited companies.<\/p>\n

A 9% tax is placed on profits leveled up to a maximum of SGD 300,000 and 17% tax is charged on profits exceeding SGD 300,000.<\/p>\n

The Singapore government pursues the popular single-tier tax policy. Thus, startup businesses are exempted from capital gain tax. The policy requires that once the taxman taxes the income at the corporate level, it will be distributed to the shareholders without being taxed again.[\/vc_column_text]

<\/div>[\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Comparing the Pros and Cons of Private Limited Company” font_container=”tag:h2|font_size:24|text_align:left|line_height:1.3″ google_fonts=”font_family:Lato%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C700%2C700italic%2C900%2C900italic|font_style:700%20bold%20regular%3A700%3Anormal”]
<\/div>[vc_column_text]<\/p>\n\n\n\n\n
Advantages<\/strong><\/td>\nDisadvatages<\/strong><\/td>\n<\/tr>\n
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  • The law treats it as a juridical person. It is therefore vested with rights and obligations.<\/li>\n
  • Shareholders are only liable to the extent of the capital they contributed. No personal assets can be attached to pay the companies debts.<\/li>\n
  • The entity can continue through a perpetual succession.<\/li>\n
  • Transferring shares is easy. Also, the law allows the appointment of additional shareholders as long as it doesn’t exceed the capacity of 50 in total.<\/li>\n
  • Startups are entitled to tax exceptions.<\/li>\n
  • Foreigners are permitted to own 100% of the shares.<\/li>\n<\/ul>\n<\/td>\n
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