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Company Act in Singapore

Updated on Thursday 19th May 2016

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Company-Act-in-Singapore1Company Law in Singapore

The main legal framework regarding companies in Singapore is represented by the Company Act, also known as Chapter 50 that was issued in 1994. However, certain types of companies will be referred to in other laws, such as the Limited Liability Partnership Act of 2005, the Insurance Act of 1994 or the Banking Act of 1994. Other provisions about Singapore companies are stated in the country’s Commercial Code.

Provisions of the Company Act in Singapore

The first part of the Company Law in Singapore defines the subsidiary and holding companies and their subdivisions, entirely owned subsidiary and ultimate holding companies, as it follows:

  • -          a Singapore subsidiary or holding company represents a company controlled by a foreign corporation that holds more than 50% shares in the subsidiary, it also controls the management board of the subsidiary and has less than 50% of the voting rights compared to the parent company;
  • -          the Singapore entirely owned subsidiary is not managed or represented by the parent company or a representative of the parent company;
  • -          the Singapore ultimate holding company is a subsidiary company of a corporation; the corporation cannot be  a subsidiary of a foreign company;

Part two of the Singapore Company Act defines the Trade Register and sets out regulations about the Act itself.

The incorporation of a legal entity under the Singapore Company Act

According to the third part of the Company Law a legal entity in Singapore can be incorporated as a company limited by shares, limited by guarantee or as an unlimited company. The incorporation of these types of companies is done with the Companies Registrar in Singapore. The documents to be submitted with the Registrar are the Memorandum and Articles of Association of the company. Applicants will also be required to provide any other information required by the Trade Register and pay a registration fee. Singapore companies are required to have at least one founding member according to the Company Act.

Other provisions of the Company Law refer to the shareholding structure, directors, the shareholders meeting, and other officers of the company, the bookkeeping and auditing of companies but also provisions about company winding up.

Our agents in company formation in Singapore can provide you all the details on how to open a company.

Amendments to the Singapore Company Law

In 2005 the Company Act in Singapore was amended and the amendments were enabled in 2006. Among them the most important are the disappearance of the notions “par value” and “authorized capital”, the allowance of capital reduction without court sanction, the reform brought to the share buyback process, the redemption of preference shares, the enabling of treasury shares and the possibility of fusion of companies without court proceedings.

For details about the Company Act or the types of structures that can be registered you can contact our specialists in company incorporation in Singapore.

 

Comments

  • Danny 2017-02-16

    Nice article! Good job!

  • Frank 2017-02-20

    Businessmen should study its structure, in order to become familiar with the applicable law.

  • Andrea 2017-02-26

    You must understand and respect the rules and regulations in the country before opening a business. Great reading!

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