A company is a business entity registered under the Companies Act, Chapter 50. It has a legal personality i.e. it has rights to own properties, has perpetual succession and can use
A sole-proprietorship is a business owned by one person or one company. There are no partners. The sole-proprietor has absolute say in the running of the business.
A Limited Liability Partnership (LLP) is a vehicle for doing business in Singapore. An LLP gives owners the flexibility of operating as a partnership while having a separate legal identity
Foreign companies wishing to setup a presence in Singapore can choose to register a Branch Office, Subsidiary Company, or a Representative Office.
| Companies | Sole Proprietorship | Partnership | Limited Liability Partnerships | |
|---|---|---|---|---|
| Legal Status |
A legal person (can enter into contracts, hold
property, sue
and be sued and exist irrespective of change
of shareholders)
|
Not a legal person | Not a legal person | A legal person (can enter into contracts, hold property, sue and be sued and exist irrespective of change of partners) |
| Number of owners/ shareholders |
Minimum – 1 director and 1 shareholder
|
1 | Minimum – 2 Maximum – 20 (except for professional firm) | Minimum – 2 Maximum – no maximum number of partners |
| Liability of owner/ shareholder |
Limited – the shareholder is not liable for the
debts of the
company
|
Sole proprietor has unlimited liabilities | Partners have unlimited liabilities | Not personally liable for the conduct of other partners or transactions or liabilities of the LLP unless is for his own wrongful acts or negligence |
| Suitable For |
Businesses with projected growth, which may
require additional
funding for expansion
|
Individual with low risk | Professional firms such as accountancy, law and architecture | Professional firms such as accountancy, law and architecture |
| Advantages |
Tax exemptions – first S$100,000 of net profit
each year is
tax-free and the next S$200,000 taxed at 8.5
percent for the first three years
|
Low cost | Low cost | Low cost setup with limited liability protection |
| Disadvantages |
Compliance obligations such as financial
reports, AGMs, etc
|
Personal assets not protected | Taxed at the individual level and requires paying a personal income tax rate that is higher than the corporate tax rate | Taxed at the individual level and requires paying a personal income tax rate that is higher than the corporate tax rate |
