Social enterprises and B corporations in Singapore are the main types of legal entities that can be created for undertaking activities that focus on social and environmental welfare. Each business form has its own setup requirements as they are governed by different organizational bodies. As such, if you are interested in setting up a company in Singapore with any of these goals, we invite you to discover their features below. Our experts in opening companies in Singapore are at your disposal.
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The social enterprise in Singapore
Social enterprises are defined by the Singapore Centre for Social Enterprise (raiSE) as businesses created with the purpose of catering to social and environmental needs. Considering there are no legal terms under which such companies can be defined, raiSE has created a set of principles to which they can adhere, as listed below:
- intention – the Singapore social enterprise must have as a main objective social impact and rely on sustainability in its activities;
- additionallity, which refers to the social impact that addresses the problems a community or group, such as economic, physical, mental, or social issues;
- proportionality, which means that the company must set aside funds for activities with social impact.
The proportionality principle refers:
- allotting a minimum of 20% of the resources to activities that improve the society/community addressed;
- the respective resources must enable the company to carry out social impact activities for at least 3 months.
According to the Singapore Centre for Social Enterprise raiSE standards:
- a company that obtains revenue and has directed funds towards improving social conditions for people for at least 3 months will be considered an Emerging Social Enterprise;
- an entity that generates more than SGD 250,000 per year, out of which 20% is dedicated to social improvement initiatives, will be considered a Leading Social Enterprise.
Please note that these are not legal requirements to comply with if you want to open a company in Singapore, but must be met in order to adhere and become a member of raiSE.
The B corporation in Singapore
Shortly known as a B Corp in Singapore, this type of company resembles the social enterprise when it comes to its objectives. From a legal point of view, it is a for-profit type of business that must be certified by B Lab.
B Lab Singapore is a non-profit organization that has created the policies, standards, and tools through which companies can receive the B Corp status. The certification is valid for 3 years and can be renewed.
To be certified, B Corps in Singapore must:
- have a social impact on the society;
- respect the social and environmental performance, transparency, and accountability standards.
This last principle is also what makes Singapore social enterprises and B Corps similar. Moreover, no matter the type you decide to launch, it can obtain both statuses. You can rely on our Singapore company formation specialists for support with its registration.
Registration of B Corps and social enterprises
Considering both types of companies must operate through legal forms before undergoing certification, they must be registered with ACRA. However, when it comes to B Corps in Singapore, they can also takenon-corporate forms, such as cases in which they must be registered with bodies like the Charity Portal.
Activities that can be completed by social enterprises and B Corps in Singapore
Both Singapore social enterprises and B Corps can activate in most industries, starting with retail and ending with beauty, as long as they respect the certification standards. According to recent statistics, there are more than 2,600 social enterprises in Singapore.
No matter if you decide to register a social enterprise or B Corp in Singapore, you can rely on our local specialists, so feel free to contact us.