Provisions restricting management may be an important protection mechanism for those who can be out-voted.
(PRWEB) August 20, 2014
Singaporecompanyincorporation.sg, a portal for company registration services, has published a to-do-guide for incorporating a tech start-up in Singapore. The guide provides comprehensive information on the risks involved with the start-up, nature of competition, type of invention, intellectual property (IP) rights, potential markets, and various available funding options, both private and governmental.
It additionally informs the technopreneurs what role the founders should play in the start-up, what shape the organisation should take in future, as well as whether private investments will be needed for future growth.
The guide comes at a time when Singapore’s Infocomm Development Authority of Singapore (IDA), which is the government’s premier agency for overseeing the technological sector in the country “is seeking to build an innovation driven economy where technology start-ups play a core role in injecting the necessary innovation and vibrancy into the tech ecosystem.”
The guide is divided into three main segments. The first lists the important considerations to take note of before making the decision to launch a tech start-up; the second explains in detail the six-step procedure to incorporate a tech company in Singapore; and the final segment gives a comprehensive account of Singapore specific aids for tech start-ups.
There is also an important note of caution for technopreneurs in the guide tool. This pertains to making sure that the “controlling rights” of the company remain with the main person behind the idea, always.
A short snapshot of the guide is outlined below.
WHY START ANOTHER TECH COMPANY
The guide explains in detail the important considerations a technopreneur should make before starting another tech company.
These include the risks associated with the start-up; whether the technology have clearly defined applications and a definable market; will the invention be a disruptive technological innovation; who will own the IP rights; the time-frame for product commercialisation; and what role should the founders play in the existing set-up as well as in the long run.
Whether the start-up will be a small yet sustainable business, grow as a company, will position itself for acquisition, or will go public, is another important point to consider. The founders must also note the initial valuation of the company and decide on the need for private investments for future growth.
SIX STEPS TO LAUNCH
The guide, in its second part, elaborates on the step-by-step procedure to follow for successfully incorporating a tech start-up in Singapore. Depending on the considerations enumerated in the first part of the guide, decision on the type of business entity is to be made.
As the major asset of a tech start-up is its IP, it is important to file a patent application before the invention comes into the public domain.
The guide also advices the technopreneur on how to network with like-minded entrepreneurs, review ideas with potential investors and evaluate the commercial aspects with targeted customers.
Planning the business details by understanding the competition, funding needs, road-map of productization, and profitability; pursuing funding aggressively; and negotiating a license or option agreement with the incubation centre are the other steps.
SINGAPORE SPECIFIC AIDS FOR TECH START-UPS
Importantly, the guide also helps the technopreneur in giving a comprehensive bird’s eye view of Singapore specific aids for tech start-ups. These include IDA schemes such as Accelerator, IDA Labs and Accreditation@IDA.
Another such initiative is the Technology Enterprise Commercialisation Scheme (TECS) introduced by SPRING Singapore, which aims to catalyze the growth of tech start-ups based on strong IP and scalable business model. Under this, SPRING provides early-stage funding for R&D efforts towards the commercialisation of proprietary technology ideas.
For start-ups who need to apply for IP protection, there is the Productivity and Innovation Credit (PIC) scheme, which the government has enhanced in recent years. Now, the PIC benefits also include the total costs incurred in filing patents.
ALWAYS HAVE THE "CONTROLLING RIGHTS"
The guide also has a special section explaining in detail the type of shareholders agreement the technopreneur should go for, so as to protect his or her interests and always possess the “controlling rights” of the company.
Ms. Cheryl Lee, manager at Singaporecompanyincorporation.sg, stressed the importance of such a clause and added,” Particularly when there are more than two shareholders, or one is a minority shareholder, provisions restricting management may be an important protection mechanism for those who can be out-voted. Typically, the shareholders agreement will provide that certain decisions require unanimous approval and others a specified percentage in excess of 50 percent.”
To view the full guide, please go to http://www.singaporecompanyincorporation.sg/blog/a-beginners-guide-for-incorporating-tech-start-ups-in-singapore/.
SingaporeCompanyIncorporation.sg is a portal for entrepreneurs and professionals who want to have a presence in Singapore. It is also a provider of company incorporation as well as the related taxation and relocation services in Singapore.
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