Business entities that can apply for Aspire account

You can easily create an Aspire account as long as your business has a UEN number and is registered with ACRA.

Provided that your business has a UEN number and is registered with ACRA, your business can use Aspire without being a private limited entity.

Different Types of Company Structures

In general, there are three basic types of company structures in Singapore, and they vary in terms of liability, the number of owners, and the relationships between them:

  1. Limited Liability Company (Pte Ltd or LLC)
    This is the most common choice for entrepreneurs in Singapore. It is an exempt private company limited by shares.

    Pros/Cons of Pte Ltd or LLC Items
    Pros There can be from 1 to 20 individual shareholders and as many directors as you need.
    A Pte Ltd or LLC is a legal entity separate from its founders, thus limiting your liability. This means that the debts, the risks, and the responsibilities are made in the company’s name, not in the founders.
    You will pay corporate tax (17% maximum) instead of personal tax (up to 22%), and your company is eligible for corporate tax exemptions.
    Cons There are certain requirements that the company needs to fulfil, such as employing a Company Secretary and filing annual returns to ACRA.


  2. Sole Proprietorship
    A business is set up by one individual. This is an option only for local residents - foreigners have to incorporate it under other registration types.

    Pros/Cons of Sole Proprietorship Items
    Pros Cheapest and easiest to incorporate and manage.
    Cons The business is not a separate legal entity but is an extension of the entrepreneur. Hence, the entrepreneur is personally liable for all business risks.
    All revenues of the business will be considered and taxed as individual income. This is usually cheaper than Pte Ltd for lower revenues, but more expensive for higher revenue buckets.


  3. Partnerships
    This entity is formed by at least two partners, up to 20 individual partners. There are several ways to set it up:
    1. General Partnership (or just Partnership)
      Similar to a sole proprietorship but with more than one owner.

      Pros/Cons of General Partnership Items
      Pros Cheap and easy to incorporate.
      Cons The liability is unlimited, and the partners are each taxed with personal tax off their individual income.


    2. Limited Partnership
      In this entity, partners have different liabilities - one is a general partner, and the other is a limited (or dormant) partner. The role of the limited partner is often restricted to funding.

      Pros/Cons of Limited Partnership Items
      Pros Allows you to have partners with different forms of involvement in the business.
      Cons The liability is unlimited, and Individual Partners are taxed at the personal tax rate (max 22%) and Corporate Partners at the corporate tax rate (max 17%).


    3. Limited Liability Partnership (LLP)
      This entity is similar to a Pte. Ltd. This allows owners to operate as a partnership while having a separate legal entity like a private limited company.

      Pros/Cons of LLP Items
      Pros An LLP creates a separate legal entity, thus limiting the partners’ liability.
      Requirements for compliance activities are low, for example, there’s no need to file annual returns.
      Cons Individual Partners are taxed at a personal tax rate (max 22%) and Corporate Partners at a corporate tax rate (max 17%).
      An LLP is not eligible for corporate tax exemptions.

Note! Whichever business entity you are operating in, usage of an Aspire account is subject to compliance approval.


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