One of the most vital aspects when you’re in the process of setting up a company in Singapore is deciding on the business structure.
A Private Limited Company is an LLC that has shares divided between no more than 50 individuals at any one time. What’s more, the shares aren’t available to the public. As of today, private limited companies enjoy the most flexibility and scalability in terms of business form. It’s hugely popular among Singapore entrepreneurs, more so than Limited Liability Partnership or Sole Proprietorship for the following reasons:
Raising Needed Capital Is Easier. Funds for expansion, capital or other purposes can be raised by generating more shares to existing holders or by adding new ones into the company. Investors are often more interested in a company that has a clear separation between business and personal assets. In the same manner, banks are more likely to lend funds to businesses that have a limited status.
Separate Legal Entity and Limited Liability. Private Limited Companies have their own legal identity which is kept separate from directors and shareholders. Moreover, the business can hold independent contracts, assets, debts and even lawsuits. Member liability in accordance with paying company debt will be set to the agreed amount they can contribute as capital.
Perpetual Succession. Businesses who have registered as a Private Limited Company with the help of company incorporation services in Singapore aren’t limited to having continuing membership of staff. Shareholder changes and shares may be transferred easily in times of trouble, such as insolvency, resignation or the death of directors or shareholders.
Lends A More Credible Image. Incorporated business entities enjoy a better image than a partnership firm or sole proprietorship. In this manner, investors are more likely to express interest in joining as it demonstrates great vision and growth. If you opt for incorporation as a Private Limited Company, business image grows within bankers, suppliers and clients.
