Company Law includes commercial and contract laws which deal with the formation and running of a corporation or company. Under this law, companies are regarded as separate legal entities for carrying out commercial enterprises under the laws of the state they are incorporated within. Company law determines the nature of interaction between investors, shareholders, creditors, stakeholders, employees, directors, corporations and community or environment. It differs from country to country and Singapore has its own laws and regulations set in place to form a company.
Kinds of Business Ownership
The different kinds of companies that can be incorporated are classified according to public or private status and on the basis and extent of members’ liabilities. The most common form of company in Singapore is limited liability company, in which the members’ liability is limited by shares or guarantee. In addition, there are also unlimited companies.
Incorporation and the Steps Involved
Creation of a company becomes legal only when it is registered under the Companies Act as the initial step. This incorporation is the legal process by which a company becomes a legal entity, with a separate identity from its owners and with its own rights and obligations. To incorporate a Singapore company, one must lodge the requisite documents and pay a prescribed fee to the Accounting and Corporate Regulatory Authority of Singapore (ACRA). The M&AA will prescribe the name of the company, the amount of share capital and whether members’ liability is limited or unlimited. Such incorporated companies are referred to as ‘Singapore Registered Companies’ or ‘local companies’.
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