Small businesses, partnership firms, freelancers stand to gain a lot and build a viable and sustainable business when they form a Singapore company.
(PRWEB) July 19, 2011
The recently released Monthly Digest of Statistics Singapore, by the Department of Statistics, Ministry of Trade & Industry, shows a sharp increase in the number of new companies registered in Singapore in the year 2010. 29,798 new companies were registered in 2010, recording an 11.4% increase over the previous year total of 26,414 companies. So far for the year 2011, until the end of second quarter 16,047 new companies have been formed in Singapore. Of all the various types of business entities registered in Singapore, Companies – including Exempt Private Limited, Private Limited and Public Limited – account for a larger share, with an average of over 53%. Registration of new Business Firms, such as Sole Proprietorship and Partnerships, fall behind Companies despite the relaxed regulatory requirements. Rikvin consultancy explains the reasons why businesses are registered as companies in Singapore.
In the era of globalization, protection of investment, innovation and intellectual resources is crucial to ensure a protracted growth and sustainability amidst stiff competition.
Entrepreneurs and small business owners must render their commercial activity a legal identity by forming a company. By forming a Singapore company, entrepreneurs and small businesses endow a legal persona to their venture which provides access to many schemes and incentives that aid in its swift growth.
A Company is a business entity registered under the Companies Act, Chapter 50. The entity is distinct from the shareholders and has a separate legal persona, which entitles it to own properties and remain perpetual unless dissolved. A company as an entity is usually, incorporated with limited liabilities in order to curtail the extent of asset exposure in case of litigations.
The foremost benefit of company is the image that it can convey to your prospective clients, lenders and service providers. It is an expression of commitment and conveys your vision to grow the business. It generates trust and reliability which therefore makes mobilization of resources relatively easy. To some extent, it even eases the challenges of finding best talents to work for you, as the potential employees will be able to perceive the earnestness of the enterprise.
The personal assets of the shareholders are protected because unlike a sole proprietorship or partnerships a company is endowed a distinct legal persona separating it from its shareholders. The shareholders are not held personally liable for debts and losses of company.
A company’s ownership is transferable and also additional shares can be issued thus facilitating easy capital injection for expansion purposes. Invariably, a business will have to resort to external funding and in the case of small businesses the first source of funding will be from the close circle of friends or relatives. By providing a stake in the company, the lenders who believe in your venture can be made a part of it and remain reassured. This will also help them keep tabs on the progress of the company.
The regulatory requirements also inculcate a fiscal discipline and paves way for controls and proper accounting practices. When the books are in order, there exists a proof for performance and it puts the company in better standing in the event of resorting to borrowing from financial institutions. You do not have to depend on personal capital or private lenders as your options would be unlimited.
Profits will be subjected to corporate tax rate, which is highly competitive as against personal tax rates and effective tax rate can be as low as 8.5%. Newly setup companies, with chargeable income of up to S$300,000 in its first three years, will be completely exempted from tax.
Those wishing to explore setting up a business in Singapore or forming a Singapore company registration and working in Singapore on an Employment Pass can contact Rikvin at +65-64388887 for expert consultation and advice.
Rikvin offers Singapore company registration, incorporation and business setup solutions for global entrepreneurs. Established in 1998, Rikvin specialise in company registration, offshore company incorporation, Singapore work pass related matters and related corporate services.