If you are a first-time entrepreneur or have your first startup, you might have many questions about the legal aspects of company registration in Singapore. The questions and confusions are valid, but understanding them is vital in transitioning from a layperson to a business owner.
This blog will answer all such questions and give you practical insights regarding what you need to know to register business in Singapore.
But before we dive into the technical aspects, let’s first understand what falls under the category of a business:
What is a Business?
A business is any setup or system designed, operated, and owned to earn profit from it. It includes using all the ways that could result in revenue generation, such as selling products, providing services, and so on.
It is also worth understanding that a business does not necessarily have a stereotypical structure, a big building, or a traditional setup. A business can also have no physical existence and could solely be operated over the internet.
It also includes home-based businesses that do not fall into the traditional category but still come under revenue generation.
Types of Business You Need to Register:
Regardless of your business type, be it traditional, digital, or home-based, you are required to register business Singapore, without which your operations won’t be legal.
If you run the business under your own full name as an individual. There are some exemptions because not all the businesses in Singapore need to be registered, but these exemptions are rare. These exemptions are as below:
- If you partner with people who run the business under their names. This exemption is when the business name is the same as the full name of all the partners.
- If you are a person, institute, or authority exempt from income tax as the First Schedule of the Income Tax Act specifies.
- If your business is a society registered under the Societies Act or the Cooperative Societies Act.
- If the business is a mutual benefit organization under the Mutual Benefits Organizations Act.
- If the business is a trade union under the registration of the Trade Union Act.
Benefits of Company Registration in Singapore:
If you have an exemption, then it is well and good. But if you don’t, then company registration in Singapore is required. But this requirement is not a bad thing. It not only brings your business into the legal net and gets you into the safe zone, but it also has its benefits.
The benefits are:
If your business is not registered, it is unlikely that your customers will trust you. It is not about how good your products or services are; people will not trust anything that is not declared, registered, and complies with the constitution.
If you register business in Singapore, you will immediately become more credible and trustworthy in the eyes of your customers. People trust governments and ultimately believe that you must be good if the government allows you to run this business.
Once your customers find you legitimate, they are more likely to use your services. Hence, the chances of your growth will increase. You will also get access to many government benefits if you register business in Singapore.
Getting registered will also give you easy access to financing and credit through official and approved channels, which would be nearly impossible to get for an unregistered business.
When you register your company, your information becomes available and verified through ACRA. This verification will open new doors for your growth.
If you remain unregistered and you cannot be searched and verified through ACRA, the chances are low that you will get an opportunity to scale your business.
Things you Need To Know To Register Business Singapore:
Now that you have understood the basics about company registration in Singapore, along with some of its benefits, let’s discuss the pre-requisites of registering a business.
To register a business in Singapore, you need only three things. These things are:
- A business structure
- A business name
- A business address
- Business Structure:
Choosing a business structure could be a little confusing. There are different types of structures that you can adopt while registering your business.
Each business structure has its perks and benefits and is ideal for a specific purpose.
For example, a sole proprietorship would be an ideal choice if you plan to run your business alone. This type of structure has comparatively lesser management and administrative requirements.
If you have more than one person in the administrative role, you should go for partnership as it will not require you to get your accounts auditing or file them.
To avoid getting personally involved and keep your liabilities at a minimum, the best option would be to go for an LLP.
Lastly, suppose your plans include expanding the business and obtaining financing. In that case, you might want to incorporate your company in Singapore as it will establish it as a separate entity and limit your liabilities around it.
- Business Name:
Once you have the core structure in place, the next thing you will need is a name to get your business registered against.
The name must be unique and must not be under or previously been used by any other company registered with ACRA. The name should also not bear a close similarity or resemblance with another company’s name registered with ACRA.
- Business Address:
Lastly, you will need to provide the address where your business is located. If you have an office or any other business space, this should not be a problem for you.
However, if you do not own a physical business, there are some ways around it. You can provide your home address as your business address because you work from home, but only for specific businesses.
If you live in an HDB flat, you will have to submit an online application to HDB, whereas you will submit the same application to URA if you own private residential property.