1. Select the legal form that your company will take
These are the most common forms of legal business organisations:
- A Sole Proprietorship
- A Partnership
- A Limited Partnership
- A Limited Liability Partnership
- A Company
- A Business Trust
Typically, most businesses in Singapore are started as a Private Limited Company, for the reasons elaborated on here.
2. Choose a name
To choose a suitable business name, you can get ideas from the following:
- - Our guide on choosing a desirable business name
- - Our domain name search service, that helps you ascertain availability of domain names before you register a company name
- - Brainstorming for name ideas amongst your principals
3. Write a Business Plan
Prepare a preliminary business plan. Set out your mission, vision, short-term and long-term goals, and demarcate your journey with key milestones that would enable you to track and monitor the progress of your company.
A business plan is also useful for the company to furnish to banks/ other potential investors/ suppliers/ trade partners in order to secure loans and/or credit facilities, because it gives them the assurance that you have concrete plans that will result in viable economic activities.
Memorandum and Articles of Association
Apart from the business plan, you will also need to consider and/or draft the company’s constitutional documents, i.e. the Memorandum and Articles of Association (M&AA). These need to set out the key characteristics of the business, how the company is internally regulated, and the manner in which members (shareholders, directors, officers etc) interact. All companies must have an M&AA, as it is required by statute and for the incorporation process. You may either choose to use the standard one found in the Companies Act, or you may design your own. The Memorandum and Articles of Association are meant to complement each other, however, if there is a conflict between the two, provisions in the Memorandum will prevail over those in the Articles.
The Memorandum defines the company and should at least contain the following:
- - the name of the company
- - the details about the company’s share capital
- - the full names, addresses and occupations of the subscribers to the memorandum and
- - a statement indicating the subscribers desire to form the company and their agreement to take up shares in it.
The Articles of Association generally contains provisions that regulate the internal management of the company. Companies are generally free to decide on the content of their articles, but the articles normally deal with matters that relate to:
- - the issue of share capital and the variation of rights attached to shares
- - liens and calls on shares, as well as, transmission and forfeiture of shares
- - procedures for general meetings of the company and notices relating to the same.
The legal effect of the M&AA is that it is considered a statutory contract between a company and its members, and among the members themselves, binding even upon new members entering the company after incorporation of the company. Non-compliance with the Articles is amount to procedural irregularity and therefore: i. where the non-compliance is by a company, a member may be able to obtain a declaration or injunction requiring the company to comply, and ii. in case of non-compliance by a member, another member of the company may be able to obtain declaratory or injunctory relief or damages.
Read more about Business Startup Checklist for Entrepreneurs at Rikvin.com.
