How to Register an Exempt Private Limited Company: BBCIncorp’s Guide |

Singapore is known globally for its business-friendly environment, strong governance, and robust infrastructure. Among its many business structures, the Exempt Private Limited Company stands out as a popular choice for entrepreneurs.

Whether you’re setting out to start your business or exploring efficient structures for growth, this guide provides a comprehensive understanding of why and how to register an Exempt Private Limited Company.

What is an exempt private limited company?

An Exempt Private Limited Company (EPC) is a specific type of private company in Singapore that meets the following criteria:

Shareholder limit: It can have a maximum of 20 shareholders, and all of them must be individuals (not corporations).
No corporate shareholders: Shares cannot be held directly or indirectly by any corporate entities.

The key difference between exempt private limited company and other private companies is the shareholder structure. While other private companies can have up to 50 shareholders, including corporate entities, EPCs are restricted to individual shareholders.

This makes EPCs an ideal choice for smaller businesses looking for a straightforward and streamlined ownership framework.

Benefits of setting up an exempt private limited company

Exempt private limited company Singapore is a popular choice for small businesses and startups due to their simplified compliance requirements, tax benefits, and limited liability for shareholders. This structure is ideal for entrepreneurs looking for a flexible and efficient way to operate in Singapore.

Limited liability for shareholders

One of the most appealing benefits of an EPC is limited liability. Shareholders are only liable for the capital they’ve invested in the company’s shares. This is a significant advantage over structures like sole proprietorships, where personal assets may be at risk in the event of business debts.

Ability to extend loans to directors

Unlike other private companies, exempt private limited company have fewer restrictions when extending loans to their directors. This provides significant flexibility in managing financial operations and addressing funding needs internally.

Corporate tax exemptions

EPCs enjoy corporate tax benefits under Singapore’s Start-Up Tax Exemption Scheme. Newly registered exempt private limited company can receive a 75% exemption on their first S$100,000 of normal chargeable income and a 50% exemption on the next S$100,000.

However, companies involved in investment holding or real estate development may not qualify for these exemptions.

Simplified compliance requirements

Exempt private limited companies benefit from reduced compliance burdens with options like simplified annual return filings for solvent companies. Small EPCs may also be exempt from audit requirements, as long as they satisfy certain criteria, such as annual revenue of less than S$10 million or fewer than 50 employees.

How to register an exempt private limited company in Singapore

Pre-incorporation requirements

Before registering an EPC, make sure the following conditions are fulfilled:

The company must have at least one individual shareholder and one director who is a local resident, both aged 18 or older.
A licensed company secretary must be appointed.
The registered office address must be located in Singapore.
The company must have a minimum paid-up share capital of S$1.

Step-by-step guide to registering an exempt private company

Step 1: Choose your company name

Picking the right name for your EPC is crucial. The name must be unique, non-offensive, and free from trademark or intellectual property conflicts. Conduct a thorough name search to avoid any issues.

Unlike other private companies, EPCs can include “EPC” in their name, making them easier to identify. Choose a name that reflects your business purpose and complies with the guidelines set by the relevant authorities.

Step 2: File the company constitution

The company constitution is a key legal document that defines the structure and governance of your business. Submit this document through the BizFile+ portal, along with other essential details such as:

Types and number of shares
Paid-up capital
Information about shareholders, directors, and key officers

Ensure the constitution is precise and aligns with your business model, as it will serve as the foundation for your company’s operations.

Step 3: Prepare a shareholder agreement (optional but recommended)

While not mandatory, a shareholder agreement is highly recommended to maintain clarity and governance. This document outlines:

Management rules
Rights and responsibilities of shareholders
Procedures for decision-making, resolving disputes, and transferring shares

A well-drafted shareholder agreement helps prevent conflicts and ensures all stakeholders are aligned on key business matters.

Step 4: Complete the incorporation process

Once all required documents are submitted, the Accounting and Corporate Regulatory Authority (ACRA) will review your application for compliance and accuracy. Upon approval, ACRA will issue your Unique Entity Number (UEN), which serves as your company’s official identification number.

With the UEN in hand, your EPC is officially incorporated, allowing you to legally operate. From here, you can open a corporate bank account, hire employees, and meet other operational requirements to kickstart your business journey.

Setting up a business in Singapore, particularly an exempt private limited company, is a strategic choice for entrepreneurs, thanks to the country’s strong economy, efficient regulatory processes, and access to global markets. Follow the steps above to establish your company and take the first step toward success in one of the world’s leading business hubs.

Post-registration compliance requirements

After the establishment of an exempt private limited company (EPC), compliance remains a critical aspect of maintaining operations.

Holding annual general meetings (AGMs): EPCs are required to hold AGMs, unless an exemption applies or members agree to dispense with them. For EPCs that opt-out, written resolutions for AGM matters must be passed and documented.
Filing annual returns: Annual returns must be filed with ACRA. Solvent EPCs may utilize a simplified annual return form, while insolvent EPCs must include comprehensive financial statements. Adherence to these requirements ensures compliance with regulatory standards.
Financial statement submissions: Depending on the company’s size and nature, EPCs may be required to file financial statements in XBRL format. Smaller EPCs have the option to use a simplified XBRL template to ease this process.
Appointment of auditors: EPCs that qualify as “small companies” are exempt from audit requirements. If non-exempt, an auditor must be appointed within three months of incorporation.

Preparing the necessary documents for registering an EPC can be time-consuming. If you’re looking to establish a legal presence in Singapore, BBCIncorp is here to help. Our Singapore company formation services ensure full compliance with regulatory requirements while simplifying the entire process for you.

With our team of experts handling the details, you can focus entirely on growing your business. Contact us today to learn more and take the first step toward building a successful business in Singapore.

Key takeaways

An exempt private limited company offers startup entrepreneurs and small business owners a flexible, tax-efficient, and low-risk structure in Singapore. Its benefits, from limited liability to eased compliance rules, make it a highly attractive option.

The registration and post-incorporation process is straightforward, and with proper planning, you can establish your exempt private limited company without unnecessary hurdles.

Contact information:

Organization: BBCIncorp

Website URL: https://bbcincorp.com/

Email: [email protected]