ACRA Requirements for Successful Business Registration in SingaporeDownload Now: FREE GST 2023 GuidebookDownload Now: FREE Employment Pass ChecklistDownload Now: Free Incorporation Checklist
Being Asia’s top financial hub, Singapore has taken extensive measures to facilitate the business registration process in the nation. Government and regulatory entities such as ACRA have developed systems that promote a conducive business climate for Singaporean businesses. Moreover, with features like low taxation rates, it is no surprise that Singapore is considered one of the top destinations globally for conducting business.
Establishing a business can often be achieved without any difficulties; however, if the requirements of the ACRA are not met, incorporation may not be successful.
Rest assured, we will guide you further on why this happens and how you can avoid it happening to you.
What Is ACRA?
Before diving into reasons why ACRA might have rejected your business registration in Singapore, let’s refresh our memory real quick on the purpose of ACRA.
The Accounting and Corporate Regulatory Authority (ACRA) is the regulatory body in Singapore for companies and public accountants.
At its core, it holds responsibility for the registration of new businesses.
Following incorporating, it then monitors ongoing business and ensuring businesses are closed down property when they cease to exist.
It has the important responsibility of deciding which businesses it allows to set up in Singapore.
Why are ACRA Requirements for Business Registration in Singapore?
1. Unique Company Name
When registering a business in Singapore, you need to choose a unique name.
This means making sure no other businesses have the same or a similar one. There are plenty of company name checking facilities you can use for this.
Business names are rejected for a number of reasons, including:
- Having the same name as another business
- Someone else has already reserved it
- The meaning is undesirable due to it being obscene, religious, or not indicative of what your company is or does
- The Minister of Finance orders the Registrar to not approve it
It’s therefore important that you do all you can to make sure the name you want to use is available and acceptable. Before you can incorporate and register a company, you need to reserve a business name with ACRA, and it needs to be approved.
This is a requirement under the Companies Act, Limited Liability Partnerships Act or Limited Partnerships Act depending on the nature of the company.
You can do this online through its BizFile+ online filing system and paying the S$15 fee.
In the situation where your company name is too similar to another company within the same industry. Regardless if your company name has been approved by ACRA, the original company can file a complaint toward yours. This will lead to your company being required to either request an appeal or change your company name. That being said, it is crucial to carefully select a company name to avoid facing legal consequences.
2. Singapore Registered Address
Section 142(1) of the Singapore Companies Act requires businesses to have an office space in Singapore that is registered to the company.
If it does not, it won’t be incorporated.
Furthermore, there are the following specific requirements of a registered office address:
- It must be a physical address in Singapore
- It cannot be a PO Box
- All communications and notices should be addressed to this location. It must also be open and accessible to the public for an amount of time no less than 3 business hours on each business day
If you live in Singapore, you can use your home address as your registered office address. However, it is important to bear in mind that the address used will be displayed in public records.
3. Required Number of Shareholders
Private Limited Companies in Singapore need to have at least 1 shareholder and a maximum of 50.
Shareholders can either be individuals or corporations, local or foreign. Shares can be 100% held by a corporate entity or a foreign individual, there are no special restrictions within Private Limited Companies.
Exempt Private Limited Companies in Singapore need to have at least 1 shareholder and a maximum of 20.
Shareholders are required to all be individuals, local or foreign. Shares cannot be held directly/indirectly by any companies.
Depending on the company type you are looking to register with ACRA, it is therefore important you familiarise yourself with the relevant rules around shareholders.
4. Local Director
While shareholders can be foreign individuals or entities, a company registered in Singapore needs to have at least one local director.
A director is defined as someone who is in charge of managing the affairs of the company.
This person can either be a Singapore Citizen or a Permanent Resident. Employment Pass or EntrePass holders may be appointed after the incorporation of the company.
There are also other basic requirements that need to be met when selecting a director which can be found here.
It should also be noted that the business needs to appoint a company secretary within 6 months of incorporation. This person must also be an individual residing in Singapore.
5. Business License
Business owners need to submit at least one SSIC code when they are incorporating a company in order to pass the name reservation stage of the application process.
These codes define its nature of business and include options like retail, travel, and healthcare.
The codes don’t necessarily determine what work your company will be doing, and they can be changed at any time after incorporation.
You just have to make sure you possess any licenses or permits you need. Failure to do so can mean that your application will be rejected by ACRA and you may face fines and enforcement proceedings brought by ACRA against you and/or the company.
Reach Out to Sprout!
With years of experience in company accounting and corporate taxation, we can help you meet ACRA requirements and register your company. We have helped numerous aspiring entrepreneurs like yourself establish their companies. As an added bonus, we are a Singapore registered company that knows the ins and outs of the Singaporean corporate system.
Sprout offers professional incorporation services to individuals seeking to establish their businesses. We offer budget-friendly packages, and our experts ensure a smooth transition while adhering to Singapore’s stringent corporate requirements. Feel free to contact us with any queries; we respond to inquiries within 24 hours.