All registered non-profit company:
A company limited by guarantee is a company that carries out non-profit activities with a national or public interest basis, such as the promotion of art, charity, etc. The company has no share capital.
A corporation limited by guarantee has members, rather than shareholders. The members of the company guarantee or pledge a predetermined amount of money to cover the debts of the company, which become due in the event of the company’s liquidation. The amount set aside as security can be as low as SGD 1.
Registration as a public company limited by guarantee:
Incorporating a company limited by guarantee for the purpose of establishing a non-profit company has the distinct advantages of incorporating a separate legal entity with limited liability for its members. Of the various choices available, this form of entity is the most advanced and desirable type of structure. Corporations limited by guarantee are generally engaged in non-commercial activities of a charitable, religious, scientific or artistic nature.
1. Reservation of the name
First of all, an advance application must be made to ACRA, especially since the name can be reserved for a maximum of 90 days. The name reservation request can be made through ACRA’s online electronic portal.
To apply for a name, the desired name must be determined, along with the proposed core business. A complete list of the core activities as defined by the Singapore Standard Industrial Classification (“SSIC”) can be obtained from ACRA. Therefore, you will need to indicate the principal activity carried out by the business.
2. Directors or Officers
A minimum of one director is required for a public limited company by guarantee. As with a limited liability company, at least one of the directors must be an individual resident in Singapore.
3. Company Secretary
Similar to the requirement for a local resident director, the appointment of a company secretary is mandatory. Generally, the company secretary (whether in-house or external) ensures that the company complies with Singapore law and advises directors, members, auditors and tax agents on applicable legal deadlines.
4. Memorandum and Articles of Association
The company must have a Memorandum and Articles of Association (“M&AA”) to govern the manner in which it is to be managed. They should contain basic elements such as how a meeting of the corporation is to be held, i.e., when notice of the meeting is to be given to the members, and how a member may appoint a proxy in his or her stead to attend and vote validly at the meeting.
Since NPOs are primarily for the public interest, they are accountable to the public and it is mandatory to prepare audited accounts. Auditors must be appointed within three months of incorporation.
6. Registered Office
A registered office is required; however, since NPOs do not necessarily have day-to-day operations similar to a limited liability company, the registered office address provided does not have to be the place of business.
7. Registration with Relevant Government Agencies
Particularly for NPOs, there are certain deadlines and registration requirements to be aware of. If your NPO is a charity and wishes to conduct fundraising activities, etc., it is required to register with the Commissioner of Charities within three months of the date of incorporation.
Also, if you want donors to be able to make tax-deductible donations, the nonprofit is required to apply for charitable status (“CPI”). Generally, a nonprofit that obtains CPI status is also required to disclose its fundraising information.
Associations registered as companies limited by guarantee in Singapore are exempt from income tax if the excess funds are derived from members’ contributions or if more than 50% of the gross receipts are derived from members and are not tax deductible for members. For full tax exemption, the company must apply for charitable status after registration.
A corporation is an association of 10 or more persons, regardless of its nature or purpose, that is not already registered under another law. Corporations are suitable for groups of members or volunteers, especially small groups that do not rely heavily on donations and external funding.
|➤ A minimum of 10 people is required to form a corporation|
|➤ 3 key position holders are required, namely the President, Secretary and Treasurer, who must be Singapore citizens or permanent residents of Singapore|
|➤ There is a requirement to have a constitution that governs the company|
|➤ There is a requirement to audit the accounts annually as well as a requirement to file annual reports with the Registry of Societies|
|➤ It does not have a separate legal identity, which means that members are exposed to liability|
|➤ Societies are registered with the Registrar of Societies (ROS) and are governed by the Singapore Societies Act|