There are several factors to consider when selecting your entity structure:

  • Liability: Only Pte Ltd and Limited Liability Partnership provide a separate legal entity and limit the personal liability of founders and shareholders. The other forms expose you to personal risks.

  • Taxes: Only Pte Ltd companies pay corporate tax rate and can apply for tax exemptions. Other company forms will be subject to personal tax instead. Above a certain level of revenue, it is more beneficial to pay corporate tax compared to personal tax.

  • Compliance requirements: Pte Ltd requires to appoint a Corporate Secretary and to submit annual reports to ACRA. These duties can however be outsourced to a specialised agency.

  • Funding: A separate legal entity is usually required to apply for loans and attract investment.


Limited Liability Company (Pte Ltd or LLC)

Sole Proprietorship

General Partnership

Limited Partnership

Limited Liability Partnership (LLP)

Owned By

1-50 Shareholders

1 Owner

2-20 Partners

2+ Partners

2+ Partners

Represented By

Min. 1 Director

Min. 1 Corporate Secretary

Owner

Min. 2 Partners

Min. 2 Partners

Min. 2 Partners

Legal Entity

Yes

No

No

No

Yes

Liability

Limited

Unlimited

Unlimited

Unlimited

Limited

Tax Rate

Corporate rate (max 17%)

Eligible for exemptions

Personal tax rate (max 22%)

Personal tax rate (max 22%)

Personal tax rate (max 22%)

Personal tax rate (max 22%)

Reporting

Annual Filings to ACRA

Easy

Easy

Easy

Easy

External Funding

Easy

Hard

Hard

Hard

Hard


(source: Osome)

Disclaimer: The above is not intended to serve as, and should not be deemed as, legal or financial advice from Aspire or any of its affiliates. Please seek professional advice before deciding on which structure to adopt and how it may impact your business, operations and affairs (financial or otherwise).