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What is a sole proprietorship? what are the major advantages an disadvantages of this form of business ownership
Strength and weakness of sole proprietorship
What is a sole proprietorship? what are the major advantages an disadvantages of this form of business ownership
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Anyone hoping to start a business in Singapore should know the different types of company setup. Basically, there are four main types of companies in Singapore.
1. Limited Liability Company
A Limited Liability Company (LLC) is more often not limited by shares. The owners of the company are protected from liabilities that may arise from the business. An LLC usually operates as a separate legal entity, quite similar to a corporation. There are three types of LLCs in Singapore: Private Limited Company, Public Limited Company and Public Company Limited by Guarantee.
- Private Limited Company (Pte. Ltd.): This type of LLC is a preference for a lot of business entities in Singapore. The shareholders are not held responsible for company debt that surpasses share capital contributed. The company’s shares belong to 50 people or even much less. These shares are often owned by a corporate entity or an individual and are not available to the public at large. It is a preference for many because it is easier to manage. Shares can easily be transferred; it has easier means to raise capital, and offers a more credible image.
- Public Limited Company: This type of LLC is different from a Pte Ltd. The shares of a company are often available to the general public. These companies will be found in stock exchange. The number of shareholders is at a minimum of least 50 people. Given that these types of companies involve the public at large, there are more rules and regulations that avoid exploitation and the misuse of public funds. This option is best for large businesses.
- Public Company Limited by Guarantee: Unlike a Public Limited Company and a Private Limited Company, this type of company is set up for non-profitable reasons. It is a public co...
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...iness and contribute to its management. This company comes along with benefits similar to those found in a private limited company. This partnership is best for business where professionals have a joint practice. It requires a great deal of organization and planning beforehand. With this in regard, it more often than not required that a lawyer draws up the agreement.
All the business entities and structures are best suitable for different scenarios. A local in Singapore would for instance work best with a Sole Proprietorship if they are the only owner and if the products and services do not present risks and liabilities. If you are a professional who is looking for starting a business with several partners in your field, then you can consider a Limited Liability Partnership. The best choice for a lot of business people and entrepreneurs is a private limited company.