Structure of a Private Limited Company

A private limited company consists of the multiple persons that make up its operations, with various role and responsibilities.

The individual roles of each person are listed below

Directors: Manage the business and act for the company (through resolutions, see below)

• Purchase properties

• Obtain loans, secure charges/ mortgages, open/close bank accounts

• Appoint individuals as directors/ secretaries

• Recommend dividends

Shareholders: Own the business (owners/ investors)

• Holds voting rights at meetings

• Entitled to the profits of the company (dividend payments)

• Approve the appointments of/ appoint/ remove directors and/or auditors at meetings

• Decide on ordinary/ special resolutions (see below)

Secretary: Ensure company compliance

• Has knowledge and experience on statutory requirements and Companies Act (Cap. 50)

• Prepare all documents to execute the items listed under the abilities of directors and shareholders

• Perform filing to ACRA

• Prepare documents relating to the company's statutory requirements

• Maintain and keep company's records

Auditor: Verify company compliance (Only if company does not qualify as a small company, see below)

• Audit accounts for compliance with requirements

• Identify any non compliance with requirements in operations

• Verify records and filing transactions are properly kept

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Note: Each company must have at least 1 local director, 1 shareholder at any point in time and the secretary position must not be vacant for more than 6 months. 

Resolutions

As a Company is not an individual person, but a legal entity, it can only make decisions by passing resolutions. While the directors and shareholders have their own respective powers in representing the company and having ownership in the company respectively, they both can decide on matters within their scope by way of passing resolutions, either at a physical meeting or by written means, with the requirements stipulated in the company's constitution (articles of association).

Director's resolution:

All matters relating to the company's operations, such as purchasing of properties, securing credit facilities, recommending dividends, investing in subsidiaries will require a resolution from the company as a form of documentation, such as the bank requiring a resolution from the company to state its intention to open a bank account. This resolution shall be decided by the directors and signed. Usually, all matters relating to the operations of the company can be decided by way of a director's resolution, other than matters requiring the approval of the members through an ordinary or special resolution, as required by the Companies Act.

Shareholder's resolution:

The shareholder's resolution are matters resolved by the members of the company, not the directors, and are decided at the Annual General Meeting, or Extraordinary General Meetings (any meetings other than the AGM). The shareholders can call for meetings to decide on matters relating to their ownership of the company, such as deciding on the appointment or removal of directors, declaration of director's fees, or declaring dividends. While the directors do have powers to appoint other director's, the members have their right by passing an ordinary resolution to remove or appoint the directors, as well as deciding if a director should be re-elected at the AGM when their term expires. The members can also pass an ordinary resolution (50% agreement) or a special resolution (75% agreement) as required to decide on various matters, based the type of resolution required by the Companies Act depending on the matters to be resolved.

Useful links

ACRA - Find out more about company related information. Click here.

IRAS - Find out more about corporate taxes, GST registration and requirements. Click here.

MOM - Find out more about employment guidelines and the processes involved. Click here.

CPF - Find out more about paying CPF contributions as employers, or medisave contributions for self-employed individuals. Click here.