A Singapore company limited by guarantee (CLG) is an enterprise used to carry out non-profit activities. Even so, it falls under the provisions of the Company Act, which means it is a corporate entity that must go through registration as any other type of domestic business.
Below, our experts in starting companies in Singapore explain the requirements for setting up a company limited by guarantee. Clients can rely on us for support with the incorporation.
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Features of a company limited by guarantee in Singapore
If you want to set up a company in Singapore and operate it for charity or other non-profit purposes, the CLG may be a suitable option. For this reason, you must first get acquainted with its main characteristics, as shown below:
- the company limited by guarantee does not have a minimum share capital;
- its Articles of Association must clearly state that it is created for non-profit operations;
- the profits of the company cannot be distributed among the members, as they must be reinvested in the enterprise;
- a Singapore company limited by guarantee does not have shareholders, it has members.
Considering it does not have a share capital, this entity can also be referred to as a public company limited by guarantee in Singapore.
How to register a Singapore CLG enterprise
The incorporation of a company limited by guarantee in Singapore is the same as for any other business form in the City State. It requires:
- securing a local address;
- reserving a trading name;
- drafting the incorporation documents in line with the features presented above;
- submitting the registration file with ACRA.
The registration of public company limited by guarantee in Singapore with ACRA is completed quite fast; however, if any other approvals are required, the procedure may extend for 2 weeks to 2 months. This may also include the application for various licenses.
You can rely on our Singapore company formation specialists for support in preparing the incorporation file.
Obtaining the charity status for a Singapore company limited by guarantee
Considering it is mainly used for non-profit activities, a Singapore CLG can also apply for charity status with the Charities Portal. To be considered a charity, such a company must meet the following conditions:
- its object of activity focuses on charitable work only;
- the same object of activity must contribute entirely or substantially to the local community;
- it must have at least 3 board members with a minimum of 2 Singapore citizens or permanent residents.
With respect to the charitable activities, a public company limited by guarantee in Singapore can carry out, the Portal mentions the following:
- promotion/sustenance of education;
- diminishing of poverty;
- promotion of religion;
- healthcare-related activities;
- animal welfare-related operations.
Should you decide to open acompany limited by guarantee in Singapore, our local consultants can also help you file for the charity status.
Advantages of a company limited by guarantee
There are several benefits linked to setting up a company in Singapore under the form of an entity limited by guarantee. Some of them refer to the possibility of acquiring real estate and having enhanced credibility, while others cover tax advantages. Among those that enter the last category, we mention corporate tax deductions and exemptions.
Charities statistics in Singapore
According to the latest data for 2022 gathered by SingStat:
- the largest number of charities, 1070, operated as religious organizations;
- the second largest number of non-profits operated in the social and welfare sector – 414;
- there were also 162 arts and heritage charities in Singapore in the same year.
If you want to open acompany limited by guarantee in Singapore, do not hesitate to contact us for assistance.