Public Company Limited by Shares

Public Company Limited by Shares | Bestar

Singapore Public Company Limited by Shares

Navigating the complexities of business structures is a critical first step for any entrepreneur, and in Singapore, the Public Company Limited by Shares stands as a powerful option for large-scale operations. This comprehensive guide provides an overview of this business entity, covering its key characteristics, advantages, incorporation process, and compliance requirements in Singapore.

What is a Public Company Limited by Shares in Singapore?

A Public Company Limited by Shares, often simply called a Public Limited Company (PLC), is a type of limited liability company. Its defining feature is the ability to offer shares and debentures to the general public, providing a significant advantage for raising capital. Unlike a private limited company, a PLC can have an unlimited number of shareholders (more than 50), making it an ideal structure for businesses with plans for substantial growth and public listing on a stock exchange like the Singapore Exchange (SGX).

Key characteristics include:

• Limited Liability: The liability of shareholders is limited to the amount of capital they have invested in the company. This protects their personal assets from the company's debts and liabilities.

  
  

• Separate Legal Entity: A PLC is a separate legal entity from its owners. It can enter into contracts, own assets, and sue or be sued in its own name.

  
  

• Public Offering of Shares: A PLC can raise capital by issuing shares or debentures to the public. This process, however, requires the registration of a prospectus with the Monetary Authority of Singapore (MAS).

  
  

• Unlimited Shareholders: This structure allows for an unlimited number of shareholders, facilitating a broad ownership base and extensive capital raising.

  
  

Advantages of a Public Company Limited by Shares

Choosing to incorporate as a PLC offers distinct benefits, especially for large businesses aiming for expansion.

1. Enhanced Capital Raising: The primary benefit is the ability to raise significant funds from the public through initial public offerings (IPOs) or subsequent share issuances. This is a crucial mechanism for financing large-scale projects, research and development, and global expansion.

   
   

2. Increased Credibility and Reputation: Being a public company enhances the business's image among stakeholders, including customers, suppliers, and potential investors. It signals a high level of transparency and good corporate governance.

   
   

3. Liquidity for Shareholders: Shareholders can easily buy and sell their shares on a public stock exchange, providing liquidity for their investment. This ease of transferability also makes the company more attractive to a wider pool of investors.

   
   

4. Perpetual Succession: The company's existence is not tied to its owners. It can continue to operate even if there are changes in its ownership or management, such as the death or resignation of a director or shareholder.

   
   

How to Incorporate a Public Company in Singapore

The incorporation process for a PLC in Singapore is a well-defined procedure handled by the Accounting and Corporate Regulatory Authority (ACRA) via its online platform, BizFile+. The general steps are:

1. Company Name Reservation: The first step is to apply to ACRA to reserve a unique company name.

   
   

2. Appointment of Key Personnel: A PLC must appoint at least one resident director who is a Singapore citizen, a permanent resident, or an EntrePass holder. It also requires at least one company secretary who must be a Singapore resident.

   
   

3. Prepare a Constitution: The company must have a constitution, which outlines the rules and regulations for its internal governance. While ACRA offers a model constitution, companies can also draft their own.

   
   

4. Filing with ACRA: The application for incorporation, along with all the necessary documents and information, is submitted through the BizFile+ portal. This includes details on the company's share capital, registered address, and business activities.

   
   

Ongoing Compliance and Regulatory Requirements

Public companies in Singapore are subject to stricter regulations compared to private limited companies. Compliance with the Companies Act and other relevant statutes is mandatory to maintain good standing.

• Annual General Meeting (AGM): Publicly listed companies must hold an AGM within four months of their financial year-end. This is where directors present financial statements to shareholders.

  
  

• Annual Return Filing: Within one month of the AGM, the company must file an annual return with ACRA, providing updated information about the company, its directors, and shareholders.

  
  

• Auditor Appointment: A PLC is required to appoint an auditor to audit its financial statements, ensuring they provide a true and fair view of the company's financial position.

  
  

• Disclosure and Reporting: Public companies have extensive disclosure obligations, including regular reporting of financial results and other material information to the public and regulatory bodies.

  
  

Set Up Fee

The initial setup fees for a Public Company Limited by Shares in Singapore include a combination of mandatory government fees and professional service provider fees.

Government Fees

These are one-time fees paid to the Accounting and Corporate Regulatory Authority (ACRA).

• Company Name Application Fee: S$15

• Company Registration (Incorporation) Fee: S$300

• Total Government Fees: S$315

Bestar Professional Service Provider Fees

Given the complexity and strict compliance requirements for a Public Company, engaging a professional corporate services provider like Bestar is highly recommended and often necessary. Bestar bundles a range of required services into a single setup package. The costs can vary depending on the services included.

A typical setup package from Bestar for a Public Company Limited by Shares will include:

• Company Incorporation Services: Preparation and filing of all necessary documents with ACRA.

  
  

• Provision of a Company Secretary: A mandatory requirement for all Singapore companies.

  
  

• Provision of a Resident Nominee Director: This is crucial for foreign-owned companies that don't have a resident director. This service usually includes a significant annual fee and a refundable security deposit.

  
  

• Registered Office Address: A mandatory requirement for the company's legal address in Singapore.

  
  

• Assistance with Bank Account Opening: Help with the process of setting up a corporate bank account.

The total cost for these professional services, combined with the government fees, can range from a few thousand to over S$10,000 for the first year, depending on the specific services required, particularly the need for a nominee director.

In summary, while the minimum government fee for incorporation is S$315, the overall setup cost for a Public Company Limited by Shares is significantly higher due to the mandatory professional services required for compliance and governance.

Conclusion

For businesses seeking to raise substantial capital and establish a strong public presence in Singapore, the Public Company Limited by Shares structure is the ideal choice. While it comes with more stringent regulatory requirements and higher administrative costs than a private limited company, the benefits of enhanced capital access, greater credibility, and share liquidity make it a powerful vehicle for large-scale enterprise and growth.

How Bestar can Help

Navigating the complex regulatory landscape and corporate governance requirements of a Public Company Limited by Shares in Singapore can be a daunting task. These large-scale entities, often aiming for a public listing, require meticulous attention to detail and ongoing compliance. This is where a professional corporate services provider like Bestar becomes an invaluable partner.

Bestar offers a comprehensive suite of services specifically designed to assist Public Companies Limited by Shares, ensuring they remain compliant, well-managed, and poised for growth. Here's how Bestar can help:

1. Expert Corporate Secretarial Services

For a Public Company in Singapore, a qualified Company Secretary is not just a formality—it's a legal necessity and a strategic asset. Bestar's team of professionals acts as your dedicated corporate secretary, handling a wide range of statutory and compliance functions:

• Filing with ACRA and SGX: From preparing and filing Annual Returns to lodging key announcements and changes with the Accounting and Corporate Regulatory Authority (ACRA) and the Singapore Exchange (SGX), Bestar ensures all submissions are timely and accurate.

  
  

• Board and Shareholder Meeting Management: We assist in preparing for and minuting board meetings and Annual General Meetings (AGMs), ensuring all proceedings adhere to the company's constitution and the Companies Act.

  
  

• Statutory Record Maintenance: Bestar maintains all essential statutory records, including the Register of Directors, Register of Shareholders, and Minute Books, to ensure they are up-to-date and easily accessible for inspections.

  
  

• Compliance Advisory: The regulatory environment for public companies is dynamic. Bestar provides expert advice on corporate governance best practices, compliance with listing rules, and the latest changes to the Companies Act, helping your company navigate legal complexities with confidence.

2. Comprehensive Accounting and Financial Reporting

Public companies are held to a higher standard of financial transparency. Bestar's accounting services go beyond basic bookkeeping to provide a robust financial framework that supports public reporting and investor confidence.

• Financial Statement Preparation: We prepare financial statements in compliance with Singapore Financial Reporting Standards (SFRS), ensuring they are accurate and ready for audit.

  
  

• Audit and Assurance Support: A public company must appoint an auditor. Bestar acts as your auditors to facilitate a smooth and efficient audit process.

  
  

• XBRL Filing: We assist with the mandatory e-filing of financial statements in XBRL format, a requirement for certain companies in Singapore, ensuring data accuracy and compliance.

3. Strategic Tax Advisory

Taxation for a public company can be complex, involving corporate income tax, Goods and Services Tax (GST), and international tax considerations. Bestar's tax experts help you manage your tax obligations and optimize your tax position.

• Corporate Tax Planning: We develop strategic tax plans to minimize liabilities and ensure you are taking advantage of all available tax incentives and schemes.

  
  

• GST Registration and Filing: If applicable, we manage GST registration and the timely filing of returns, ensuring your business remains compliant with IRAS regulations.

  
  

• Cross-Border Tax Consultation: For public companies with international operations, Bestar provides advisory on double taxation agreements and global tax compliance, helping you navigate cross-border transactions efficiently.

4. Human Resources and Payroll Outsourcing

As a public company grows, so does its workforce. Managing payroll and HR compliance can become a significant administrative burden. Bestar's outsourcing services allow you to focus on core business functions.

• Payroll Management: We handle all aspects of payroll, including salary calculations, CPF contributions, and the generation of payslips, ensuring accuracy and timeliness.

  
  

• Employment Pass and Visa Applications: Bestar assists with the application and renewal of work passes and visas for foreign employees, a crucial service for companies with international talent.

  
  

• HR Compliance: We provide guidance on Singapore's labor laws and regulations, helping you maintain a compliant and well-structured HR framework.

  
  

Why Choose Bestar?

• One-Stop Solution: Bestar offers a holistic suite of services, meaning you don't need to engage multiple firms. We provide integrated support from incorporation and compliance to accounting and HR.

  
  

• Dedicated and Experienced Team: Our professionals have extensive experience working with a wide range of companies, including those preparing for or already listed on the SGX.

  
  

• Commitment to Excellence: We are a licensed filing agent with ACRA and are committed to providing reliable, transparent, and value-added services to our clients.

  
  

By partnering with Bestar, a Public Company Limited by Shares in Singapore can offload complex administrative and compliance tasks to trusted experts. This allows you to allocate your resources towards strategic initiatives, investor relations, and driving the sustained growth of your enterprise.

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