Singapore Companies Classification
The Companies Act provides various classifications of companies and these are dealt with here briefly:
- A private company is one which limits to 50 the number of its members; restricts the right to transfer the shares; prohibits public subscription and prohibits invitation to deposit monies with it, with or without interest.
- A public company is one which does not have the restrictions imposed on a private company, ie a company other than a private company.
- An exempt private company is one that does not have a corporation as a beneficial shareholder directly or indirectly and have less than 20 members.
- A foreign company company is one incorporated outside Singapore.
- An unlimited company is one on whose members a liability limitation is not imposed.
- A trustee corporation is a public company under the Companies Act or under the laws of any prescribed country which has been declared by the Minister of Finance to be a trustee corporation.
- A related corporation is one that is a subsidiary of other corporation or holding company of the other corporation or a subsidiary of the holding corporation of the other corporation.
- An investment company means a corporation (not being a private company) so declared by the Minister for Finance. Such a company is engaged primarily to invest in marketable securities for the purpose of revenue and profit. It must not, however, exercise control over a company in which it invests. Some further restrictions on such a company are – it cannot borrow an amount which exceeds twice its net tangible assets; it cannot invest in a company an amount or amounts which in total exceed 10% of its own tangible assets; it cannot invest, in total, amounts which exceed 10% of the subscribed capital of that company; it cannot underwrite any issue of securities which in total exceed 40% of its own net tangible assets; it cannot issue a prospectus unless its objects clearly specify the types of securities it is to invest in and the locale, ie Singapore and, or offshore, of such investments; it cannot hold shares in other investment companies and cannot buy or sell or deal in any raw materials or manufactured goods with a view to making a profit.
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