A Guide to Singapore Company Law

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A Guide to Singapore Company Law
Bestar Services Pte. Ltd
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A Guide to Singapore Company Law

• Singapore policies insist that the company is
  required to follow certain rules when they
  undergo the process of incorporation. All the
  companies that register in Singapore need to
  follow the correct process.
• Therefore, it is necessary for an entrepreneur to
  understand the Singapore Company law. This
  enables the entrepreneur to handle all the
  procedures to incorporate a company in Singapore.
  The article we have curated here helps you
  understand the Singapore company laws for an easy
  understanding of the process.

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Registering Singapore Company
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Types of Business Ownership

• You could be incorporating various types of
  companies and they could be either private or
  public. But generally, the company formation is
  dependent on the extent of its members
  liabilities.
• The most commonly found type in Singapore is an
  LLC company. LLC stands for Limited Liability
  Company. It is when the liability of the members
  is secured by a guarantee or shares. Apart from
  this, there are unlimited companies too.

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Results of a Company Registration in Singapore

• The basic result of company registration in
  Singapore is that the company happens to be a
  corporate body. This company/corporate body holds
  the power to sue someone. The vice versa is also
  possible. After all, the company can go on
  forever, with an indefinite survival.
• The company loses its existence only if it shuts
  down. Additionally, the members get limited
  liabilities if the company shuts down. During the
  process of incorporation, the company defines a
  personality. But the existence of the company is
  considered separate from the company members.
• This brings out a most important result the
  debts and obligations thus incurred will be owned
  by the company. The company members are not
  liable for these debts/obligations. In such
  cases, the company creditors can ask only for
  company debt payments. If the company does not
  have any debts to handle, the credits will bear
  the losses.

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Power and Company Rights

• The rights and power of the company are legalized
  under the Companies Act Provision, the
  memorandum, and articles. Therefore, no one can
  contest these powers and rights. The legal
  personality has a specific set of rights.
• These include the ownership of the property, to
  sue or be sued, keep the identity alive even in
  the case of change of the membership. They can
  also enter or exit the contracts while separating
  from the participants.
• The management of the company is decided by the
  board of directors. They ensure that the company
  follows these laws while they protect the
  interest of their companys shareholders.

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Lifting the Corporate Veil

• We defined that the companys personality is
  different from the members of the company. But
  sometimes, the legal bodies consider the two
  things as one. For instance, the court may hold
  the company members accountable and liable for
  the debts incurred by the company.
• This implies that the court holds the power to
  lift the veil of incorporation by common law or
  statute incorporation.

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The rights and responsibilities the shareholders
have

• All the shareholders of the company have specific
  rights under the Companies Act. Shareholders are
  not considered members. Therefore, they cannot
  exercise membership rights and are also not
  subject to member liabilities. A person can
  choose to be a member during the incorporation
  process.
• But members have to ensure that the memorandum
  and articles are strictly followed. These members
  should be able to do the following
• Access the companys finances and relevant
  records.
• Attend and cast their vote during the meetings.
• Circulate general meeting calls.
• Offer fair treatment.
• It must not be forgotten that the companys
  assets are owned by the company as the company
  holds its own legal identity. The shareholders
  can slap a legal suit against the company if they
  find a breach in the activities.

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Statutory Duties

• The directors of the company are company trustees
  and they are obliged towards fiduciary duties
  towards the company. In addition to this, the Act
  promotes specific obligations on directors that
  show the general requirements under the law.
• One important arrangement in section 157(1)
  supports an executive continuously acting
  sincerely and using sensible determination in
  releasing office obligations. Section 157 (2) of
  the Act provides that an officer cannot make
  unnecessary data utilization because of their
  position rights as an organization specialist.
• This section also covers picking up, by
  implication or deliberation, over what
  preferences he has. But section 157 is not a
  detailed guideline that identifies the
  responsibilities an executive has, towards the
  company. This section states that statutory
  commitments are obligatory.
• Also, the responsibilities at a custom-based law
  can manage provision by having a settlement
  within the organizations.

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Powers and Duties of a Director

• The directors are part of the companys routine
  activities and events.
• Therefore, it is understood that the director is
  at least 18 years old or more.
• It is understood that they carry a healthy
  mindset and are Singapore residents.
• Their basic responsibility is to apply honesty to
  all their actions and duties.

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Detachment From Ownership And Management

• The law shows that the matters of the
  organization can be overseen by the company
  chiefs.
• Therefore, they can exercise all the organization
  forces apart from any powers of the act.

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Conclusion

• These are the most important things you should
  know while understanding Singapore Company Law.

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