Entrepreneur’s Guide to the Company’s Structure
Entrepreneur intending to establish a private limited company in Singapore often face certain basic questions that revolve around the definition of a corporation.
For example, what does the term “legal entity” mean for companies? What does “corporation” mean in Singapore? Who runs the company? What positions do managers hold and what responsibilities do they perform? What does the company’s charter mean? When and how to implement limited liability?
Entrepreneur & the legal essence of the Singapore Corporation
Individuals planning to establish a company in Singapore for the first time often have little idea how a company differs from its owner in legal terms. Companies registered in Singapore have two legal features that allow them to operate independently. These include:
- A separate legal entity
- Capacity
Key components for Entrepreneur
Companies operate through their entrepreneur and officials or directors’ resolution in writing. Directors are often considered the company’s “brain and inertia centre.” They are followed by shareholders (members of the company) in importance. They are the mind and will of the company, realizing what it does.
The actions of the entrepreneur, directors and members of the company are considered actions of the company. The scope of each is determined by the founding treaty and the statute, which complements the general principles of Singapore’s company registration legislation.
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Directors
A Singapore-registered private limited company may have one or more directors. At least one of the directors must be a local resident of Singapore. Listed companies must have at least three directors.
The role of directors (& entrepreneur)
Directors are responsible for managing or overseeing the management of the dormant company’s affairs. Job responsibilities vary depending on the size and type of company and the role of directors in it.
Directors have very broad management powers. This means that most of the capital and enterprise decisions that the company needs to make in the course of its activities are made by entrepreneur and directors.
Directors’ responsibilities:
- General disclosure responsibilities
- Maintaining the company’s relevance and accounting;
- Preparing financial statements for the company’s annual general meeting of shareholders
- Ensuring that the first annual general meeting is held within 18 months of the company’s registration, and subsequently each calendar year at intervals of no more than 15 months
- Knowing that there are regular meetings of directors and shareholders to review the company’s financial condition and market position
- Ensuring that the company maintains a register of shareholders and other statutory documents and their storage at the company’s official address
- Appointment of an auditor within three months of the company’s registration.
Shareholders
Members of the company are known as shareholders. Each Singaporean company must have at least one shareholder. In a broad sense, shareholders own the company. These are individuals who have invested in the company money and expect that they will profit from their investments if the company succeeds, or dividends from the company’s profits during its commercial activities, or increase the value of their investments in the company over time.
Shareholders get following special privileges:
- the right to vote on issues such as board elections,
- right to propose shareholder meeting resolutions,
- the right to participate in the distribution of the company’s income,
- right to acquire new shares issued by the company, and
- the right to the company’s property in the event of liquidation.
Company secretary
The Secretary plays a major role in the registration and conduct of the company’s affairs. It is he who ensures compliance with numerous instructions applicable to companies. It maintains the necessary registries, sends out notifications, organizes meetings, maintains protocols and submits all sorts of forms required by the Accounting and Corporate Regulatory Department. Its main responsibility is to work with documents and conduct procedural measures related to the management of the company. This means that his efforts depend on the smooth management of the company.
