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Private limited company advantages and disadvantages.

In:

Advantages / Pros:

  • Separate legal entityfrom members and directors, which means that members and directors are not personally liable for the losses and debts incurred
  • Easier to obtain fundingduring start-up years and also eligible for government funded micro loans offered by local banks
  • Succession of Company is perpetual, until they are struck off or wound up
  • From the Year of Assessment 2020:Your company is required to pay the tax at 4.25% on the Net Profit for the first SGD100,000/-, whereas at 8.5% and 17% for the next SGD100,000/- and beyond first SGD200,000/- respectively effective from the Year of Assessment 2020.
  • Singapore companies do not have to pay taxes on capital gains or dividends.
  • And many more.

Disadvantages / Cons:

  • Higher registration cost and also costly to maintain
  • More compliance obligations (e.g., a company secretary has to be appointed within 6 months of the company’s incorporation)
  • Annual General Meeting has to be conducted
  • Annual Return filing with the Authority
  • Estimated Chargeable Income and Corporate Tax to be filed
  • Limitation in Fund Raising compare to Public Company
Click here to learn more about Singapore Private Limited Company by Shares.