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Incorporating a Business? Consider These Three Things
When your small business starts to grow and expand, it might be a good idea to incorporate it. Incorporating a business means that your business is a separate legal entity from your personal assets. This is an important step so that, if the business fails, your personal assets are safe; they’re not used as collateral to pay existing debts and investors.
Moreover, incorporating your business brings you a certain degree of credibility. You surely would be reluctant to engage with a company with no legal standing, right? Not to mention that corporations often get incentives or subsidies from the government, enabling you to manage and run your business in a more productive and cost-efficient manner.
Generally, the incorporation process takes a few similar steps no matter where you are in the world. The steps are as follows:
Selecting a name
A name encapsulates what your business is about. It represents your mission and values to your audience. Choosing the right name is essential.
Always remember to check with your local business registry body on whether the name you have selected has been registered or trademarked by other entities. For example, in Singapore is done through the
Selecting a location
As mentioned above, governments often offer tax incentives or subsidies to attract companies into opening their business in a particular area. This means that you can reinvest a bigger portion of your cash flow back into the business instead of paying taxes. In turn, you provide employment opportunities for residents and economic betterment in the place where you open your business. Recently, we covered the five best Asian countries in which to open or expand your business.
Capital refers to the amount of money needed to set up and run your business. Funding can be achieved in several ways, such as through venture capital or several angel investors that believe in your company’s vision and its growth potential in the future.
These investors are called shareholders, signifying that they own a stake or shares of the company. Such ownership comes with a few privileges, such as voting rights relating to the company’s needs. Shareholders vote to elect a Board of Directors, who set policies with the best interest of the company in mind.
Nowadays, the members of the Board of Directors may also be shareholders, especially for small and medium-sized companies, unlike a public company where the shareholders are typically institutional or retail investors.
Incorporating a business might be in your best interest as it offers benefits that can be beneficial down the road. However, incorporating your business is not a one-and-done process; it can be complex and time-consuming, especially if you don’t know where to start. We hope that this article can be helpful to you in your incorporation journey.
Are you looking to incorporate or register a Singapore company or elsewhere today? Look no further and start it with
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