Private limited company
What is a private limited company?
A private limited company is the most scalable, advanced and flexible business structure in Singapore. It is the most common type of business structure in Singapore.
When you create a private limited company, you are creating a separate legal entity from yourself. It limits your liabilities as an individual – meaning that if your company has a huge downfall (eg. debts or losses) in your business, it will not impact any personal assets that you own.
Advantages of a private limited company
Owning a private limited company can be worthwhile for one, in terms of tax benefits. Here are a few advantages:
- Profits taxed at corporate tax rates (17%)
- New companies are entitled to tax incentives and tax exemptions
- The company is a separate legal entity from its shareholders and directors
- Ownership can be transferred
- Ease of raising capital
- Attractive to outside investors
Disadvantages of private limited company
For some, a private limited company might not be the best option. Below we have listed a few disadvantages:
- Operating costs are higher (administration requirements etc)
- Directors must disclose their company’s information (interest in company shares, contracts etc)