Understanding What Does It Mean To Be an Incorporated Company

The procedure by which a company or a corporate entity is formed is called incorporation. After incorporation, the resulting entity gets a unique legal identity, and its assets and income become separate from that of the investors and owners. It is the process by which you formalize a business and bring it into existence. If you want to start a business, you must know what it means to incorporate a company in Singapore and all the legalities involved.

Expectations from an incorporated company

  • An incorporated company has to comply with the rules and regulations laid down in the Companies Act 2013
  • The directors of the company are responsible for its activities and must always act in its best interests

The main features of an incorporated company

The following are the features of an incorporated company:

  • The Articles of Association drafted for the company states the main purpose of the business, location, the number of shares issued if any, and its class.
  • If it is a closed corporation, the firm will not issue stock.  Small firms may have only a single shareholder, while large firms may have several
  • The shareholders only have to pay for their own shares
  • Shareholders have the right to receive the company’s profits mostly as dividends
  • Usually, the shareholders elect the company’s directors annually. If it is a small company, it can have only a single director, while a large firm can elect more directors  
  • Directors are not personally liable for the company’s debts except in the case of fraud or any particular tax statutes

The benefits of being an incorporated company

Incorporation gives a company and its owners the following advantages: 

  1. The owner does not have to use personal assets to repay the company’s liabilities. The shareholders and directors get the advantage of limited liability
  2. It allows easy transfer of ownership to a third party
  3. The tax rate achieved is usually lower than that on personal income
  4. The company can raise more capital through stock sales
  5. It allows companies to take the risk of growing their business without the fear of financial liability personally for the owners, directors and shareholders

It is evident that though ensuring legal compliance under Indian law involves a lot of processes, getting your business incorporated is beneficial.  3E Accounting India provides professional company incorporation services that ensure your business is free from legal hassles and is compliant with all mandatory legal obligations. We are a leading India corporate service provider having years of experience helping companies with incorporation processes, and guiding them in accounting, taxation, documentation, and other related issues.




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