The 5 Biggest Singapore Company Incorporation Mistakes You Can Easily Avoid

Even the most trivial mistakes made while incorporating your company can interfere with the success of your business. Given below are some of the biggest Singapore company incorporation mistakes.

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1. Not Formally Incorporating

Formal Incorporation can be a tedious process but it will save your company from a lot of problems in the long run. By formally incorporating and creating an entity like an LLC or S-corp, you are separating your personal assets from your business. This will ensure that your personal assets and finances are protected in case your business gets sued or goes bankrupt.

In fact, formal company  incorporation protects the interest of the company’s shareholders and directors by creating a protective sphere of limited liabilities known as the Corporate Veil. This will prevent many risks which are related to financial liabilities.

Some companies attempt to incorporate on their own without the help of a professional. If you don’t have thorough knowledge about incorporation, you can end up making a lot of wrong and costly decisions for your company.

Raymond Chan of Piloto Asia states that, “Formal Incorporation is not as easy as it looks. You have to know the right paperwork to file and how to properly structure the internal corporate documents. This is why I highly recommend every company to choose a specialist service instead of doing it on your own.”

2. Failing To Name Your Entity Properly

Naming your business informally isn’t enough. If you don’t establish a legal name for your entity, you will be assigned an identification number that will be used in all legal proceedings. This not only affects brand recognition but can also delay the expansion of your business.

If your entity’s name isn’t legal in the eyes of the state, you will receive a new identification number every time you enter a new state to conduct business. This can create a lot of confusion so it is better you establish a legal name from the first day itself.

You should make sure the name you choose for your company isn’t the same as that of an existing corporation if you are organizing your business as a corporation, LLC or a limited partnership.

If your business uses a fictitious name that is different from its legal name, you will need to register it with a local Singapore government agency or your local county clerk’s office.

3. Forming The Wrong Business Structure

The type of business entity you choose should be dependent on factors like liabilities, taxation, and record-keeping.

For example, some small businesses tend to form S-corporations without learning any of its downsides like the high legal and tax service costs and the difficulties of raising capital because S-corporations can only issue common stock.

There are some small businesses that go for the corporate structure blindly without any prior consultation with a professional. They end up navigating a lot of complex rules and regulations and even get subject to double taxation.

While small businesses can definitely benefit from the liability protection of a corporate structure, it is highly recommended to consult a professional before they decide on a business structure.

If you are a company owner in Singapore, Piloto Asia will help you decide the best corporate structure for your company if you are not sure which one you should organize as.

4. Not Creating A Minute Book

Every corporation is legally required to keep a minute book. A minute book is a collection of all the important corporate records.

All corporations must have their corporate documents like the bylaws, director and shareholder resolutions and other relevant articles at their registered office.

Some companies who go down the DIY incorporation route fail to keep a minute book.

5. Not Including Share Restrictions

Unless an exemption applies, if a corporation issues shares, the corporation must provide a prospectus to the person buying the shares and report the issuance of shares to the Securities Commission because it is required by the law.

Some companies fail to provide a proper prospectus and report the issuance of shares.


It is always better to be on the safe side and avoid these common company incorporation mistakes by hiring a professional company incorporation service. You will end up saving a lot of time and energy in the long run.

If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.

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