Private Limited Company (LLC) Vs LLP Vs Sole Proprietorship

Last modified: December 12, 2015

Private-Limited-Company-singapore

It is important to know the available business structures that an entrepreneur can use for the Singapore business incorporation. Entrepreneurs especially, Singapore residents benefit from going through a comparison of Private Limited Company (PLC), Limited Liability Partnership (LLP), and Sole Proprietorship.

Choosing a Right Business Structure for the Incorporation of Company in Singapore

It helps to know the strengths and the limitations of a business structure before using it to establish a Singapore company setup.  The choice of a business structure has the potential to affect the tax rates and statutory compliance that will become applicable to the proposed business entity after the registration. It may also impose restrictions on the ability of the business to raise capital for the future expansion of its business activities.

Singapore has earned its reputation for being the financial hub of the Asia. Singapore’s business-friendly attitude, the negligible amount of corruption, infrastructure, and extensive transportation and communication facilities are an invitation to the self-motivated individuals.

Singapore PLC Vs LLP Vs Sole Proprietorship

Comparing Factors PLC LLP Sole Proprietorship
Legal Status Separate legal entity Separate legal entity Not a separate legal entity
Debt & Liability Ownership Shareholder’s liability is limited to his capital in the company Partner’s liability is limited to the extent of his investment in the LLP The owner has Unlimited Liability. The owner’s personal assets are pledged to  debts and losses
Perpetual Existence Yes Yes Dissolves with the death of the owner
Raising Capital Raising capital is easy Raising capital is difficult Raising capital is difficult
Registration Timeline 1-3 days 1-3 days 1-3 days
Taxation 8.5% of Corporate tax for profits up to S$300,000 and 17% for profits above S$300,000 Individual partners pay personal income tax (0% – 20%) and corporate partners pay corporate income tax (0% – 17%) The owner pays personal income tax (0% – 20%)
Transference of Ownership Easy to transfer partial or full ownership of the company, by a simple transfer of shares Difficult to transfer the ownership of the business. Cannot sell it as a whole. Easy to transfer by selling business assets
Maintenance Requirements Paperwork and setup/compliance costs are high Paperwork and compliance costs are lesser than a PLC Paperwork and compliance costs are a bare minimum
Branding Credible setup, creating strong public perception Mild public image, and lesser credibility Holds low public perception and credibility
Dissolution Needs to be dissolved using Strike-off or Wind-up process. It is costly. Needs to be dissolved using a milder form of Strike-off process. Issuing of a notice of termination and a notice of cessation to authorities is enough.

If you eager to incorporate a Singapore company, it is highly important that you know the facts mentioned above. Each business structure has its own distinct advantages and weaknesses. An entrepreneur benefit from choosing the structure that compliments his or her business’s needs.

We, SG Company Incorporation, are here to answer your queries and assist you in a fresh start. Our incorporation experts are there to match your needs to the most appropriate business structure and are fully capable of registering your Singapore business in 1 – 3 business days.

For registering a PLC, LLP, or a Sole Proprietorship in Singapore, contact us +65 6536 0036 or mail us at info@sgcompanyincorporation.sg.