What are the reasons due to which ACRA can deny company incorporation?
Several business owners arrive in Singapore to start operating business, and even most of them have got their company successfully registered by ACRA.
Singapore is considered one of the best locations for doing business all over the world. Large numbers of business owners visit Singapore from different parts of the world to benefit from Singapore low taxes and fees compared to several other countries.
No doubt, incorporating a company in Singapore is much easier and convenient but never create a misconception in your mind that your company incorporation application will never get rejected.
There are some reasons due to which company incorporation gets rejected by ACRA. Jump into the article and have a glimpse of a few reasons why ACRA can deny company incorporation.
However, if you are a foreigner and willing to do business in Singapore, you should apply for entre pass Singapore. This scheme grants eligible foreign business owners to successfully start a business in Singapore.
Company name not approved
As per Singapore law, those business entities willing to continue operating in Singapore first need to register their business with accounting and corporate regulatory authority (ACRA).
Before finally filing the application for company registration, every business owner should first select their company name that was not previously registered with any business. Finding the name for sole proprietor or partnership business comes under the category of business names registration act.
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Reservation of the name for the company, i.e. limited partnership or limited liability partnership, falls under the companies act, limited partnership act and Limited liability partnership act, respectively.
There are several other reasons why the registrar denies the proposed business name. Some of them are as follows:
- Undesirable meaning
- Same as the name of any existing business
- Match with some other registered proposed business name
- Ministry of Finance has told the registrar not to accept the name.
Another reason that leads to the rejection of your company incorporation by ACRA is due to failure in meeting the shareholders’ requirements. As per Singapore law, it has been stated that a private limited company must have at least one shareholder and a maximum of 50 shareholders in the company.
Shareholders can be natural persons or corporations that can be either a local resident or a foreign individual. Apart from this, Singapore grants 100% ownership to foreign shareholders.
In order to successfully become a shareholder, you will require buying the shares of the specified company. However, the company should be a separate legal entity. The shareholder must not be holding any assets of another company or should not be under any company’s debt.
Besides, shareholders get liable to certain rights, as they will be considered as owners of the company. Obviously, after getting liable to these rights comes several responsibilities and every shareholder should be aware of those responsibilities.
No registered address in Singapore
In order to start operating a business in Singapore, you need to be compliant with Singapore laws. As per the laws, it has been stated that business owners need to find relevant office space and register the company successfully by ACRA. This condition is mandatory under section 142(1) of the Companies Act, Cap. 50.
A registered office address of your company should fulfill the following criteria:
- It should not be a PO box address.
- Ensure that the address you provided in the company incorporation form should be the physical office address in Singapore.
- It should be situated at the place where all required communication and the notices should be addressed. However, it must be open for the public for at least 3 hours during the general business hours on every working day.
Always remember that your company will get a mail from the concerned government agency. Reminders can be anything related to the new incentive, annual requirements, and it can also be the compulsory mail from the bank. So it is advisable to consistently keep checking the mail if you do not wish to miss any of the information details.
If you are residing in Singapore permanently, you can use the home address for your registered office address. Moreover, this needs to be done through the Home Office Scheme with URA or HDB.
Note: Always remember that you need to fulfill some relevant requirements which need to be fulfilled to register your home address as your office address. In case you did not fulfill the required conditions, then your permit might get revoked.
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If you wish to get your company registered in the first instance only without getting rejected by ACRA, then you must keep the above possibilities of rejection in mind and prevent making these mistakes.
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