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Incorporate Your Singapore Business as a Limited Liability Company

Posted last August 8, 2015, 1:29 am in Business report article

A Limited Liability Company (LLC) is a very powerful business structure. It borrows from corporations as well as from the partnerships. This legal business structure borrows tax efficiency from the corporations and operational deftness from the partnerships.

Features of Limited Liability Company (LLC)

The owners or the shareholders of the LLC, in Singapore, are called as members. The advantage of forming an LLC is that it limits the liability of the members to the amount they have used to buy its shares.

An LLC is a legal person and has a separate existence from its owners. It can trade and buy property in its own name to further its business activities. It can sue or be sued in its own name.

Forming an LLC is very useful to give identity to your business. An LLC is an artificial legal person that has the rights of a natural person. Consequently, its losses or the debts accruing from its business activities are its own responsibility. If it is needed, the property in the name of the company is used to pay off its debts. Whatever the case, member’s personal assets are not used for this purpose.

In Singapore, an individual can from an LLL, and be its sole member and later on, sell its shares to the others to expand the capital. Singapore authorities allow corporate to buy 100% shares of the LLC. Even foreign corporate can be the sole owner of the Subsidiary Company, a form of limited liability company.

In Singapore, three forms of the LLC are utilized. They vary in the maximum number of members they can have. They are as follows.

Private Limited Company (PLC)

The entrepreneurs, Singapore citizens, permanent residents, and even foreign individuals can form a PLC. It must have at least one member and the number should go beyond 50.

Exempt Private Company (EPC)

An EPC has at least one member and the number must not exceed 20. This is a specialized form of the LLC. It is most useful to the business in getting audit exemption. Its annual revenue must less than S$5 million and it must not have a corporate shareholder.

Subsidiary Company

When foreign companies want to incorporate a limited liability company in Singapore, they have the option of registering Subsidiary company. The foreign registered company can own 100% of its subsidiary. A subsidiary company has separate legal existence from its own foreign-based parent company.

An LLC has perpetual existence. Its existence does not depend on the sale or the transfer of shares, nor, it is dependent on the life or death of its members. It also means that a limited liability company keeps on existing unless it is wound up or strike off legally. Both are complicated and costly procedures needing hiring of the experts and takes months to accomplish.