In Singapore, you can register a new business as a sole proprietorship, limited liability partnership, or a private limited company. However, setting up a private limited company in Singapore is the smart option. The owners also prefer, to a lesser extent, to register their proprietorships. However, the Pte Ltd stands out as the natural option for a long-term player.
Starting a Small Business in Singapore
If someone has told you that the Pte Ltd companies are for big players, then disregard the advice. You can very much start a small business in the form of a private limited company. A Pte Ltd has the rights of the natural born person. It has an independent identity and can sue or be sued by others. It can get into contracts with others and buy or sell properties.
You may find that the company formation cost in Singapore is higher than the cost of registering a sole proprietorship or a limited liability partnership. However, Pte Ltd is the right legal structure if you are looking for the personal liability protection.
Your assets are not used to pay the debts or losses of the Pte Ltd. And, it is easy to sell and transfer its shares and go looking for another adventure. So you choose the right business structure and let your incorporation agent worry about how to register a Pte Ltd company in Singapore.
Running a new company in Singapore is not a joke. You have to master various tasks, and there are always chances of you making an error. The learning curve is steep for the newbie entrepreneurs. However, you should ensure not to commit the mistakes described below.
Starting a Business in Singapore Without a Competent CPA
The process to register a company in Singapore for a foreigner or a local entrepreneur is the same. However, before committing your resources to it, you should take advice from a CPA (Certified Professional Accountant).
The expert can advise you on how different legal structures can affect the taxation of your business, or government grants or tax exemption schemes it can claim. In Singapore, a CPA firm can act as your incorporation agent. So, it makes sense to hire one as your Singapore company incorporation services provider.
Forming, then Running a Singapore Company Without Licenses
You cannot just go and start your business activities after setting up a private limited company in Singapore. First, you must check whether you need any business licenses or permits. If you need them, you should ask your agent to apply and acquire them for you. It would be a great mistake to start your activities without one. You may have to pay fine or a penalty.
Setting Up a Business, then Failing to File
ACRA (Accounting and Corporate Regulatory Authority) is a very strict about the paperwork and timely filing. It expects Singapore companies to be prompt in updating their company register folder, payroll, and books of accounts.
ACRA also expects company directors to take the initiative and be prompt with their annual filing and XBRL filing. You may be running a new company, but still, you have to assess whether it needs GST registration. Your services providing firm can assist you with the GST filing as it can with other taxes including corporate tax.
Incorporating a Singapore Business then Failing to Sell
If you want to continue to run your business, you need to sell your products to generate revenue and maintain cash flow in your favor. Without it, you will not be able to survive for long.
You will have to offer pro customer deals that will help you in gaining their loyalty. Even a successful company needs its loyal customer base. Without it, it will lose its way and get into difficulties.
Starting a Company then Failing to Fix the Capital You Need
You must have sufficient capital to operate your business. Even the bootstrappers trying to embrace the entrepreneurship with the patched-up funds must ensure to cover business’ liabilities with enough revenues, assets, capital, or insurance.
It is not that you will need a train-load of capital to back your adventure. The amount may also depend on the type of the business you are operating and whether you deal with the public (B2C) or other companies (B2B). You must discuss business’ finances with an experienced CPA who can assist you in determining how much capital you should actually possess. It is essential to know your metrics beforehand.
Setting up a private limited company in Singapore is an excellent option for the startups and small business owners. It provides them with limited personal liability, credible brand image, ability to raise funds for future expansions, access to tax exemption schemes, etc. And, a Pte Ltd, unlike a proprietorship or partnership, has perpetual existence.
If you are a first-time business owner, taking advise from an expert or finding a mentor is a way better option. It may cost you, but, you will successfully be able to avoid making mistakes and damaging your credibility and brand name.