In order to benefit from restricted financial liability, non-profit organizations like association groups, sports clubs, and workers’ cooperatives most frequently form limited by guarantee businesses.
Non-profit organizations in Singapore are permitted to carry out their operations through charity trusts, societies, and Company Limited by Guarantee (CLGs). Tax exemptions, no share capital requirements, and restricted liability are some advantages of creating a CLG.
Define the Goals and Organization
Clubs, groups, charities, and non-profit organizations frequently use a Company Limited by Guarantee CLG. Instead of giving away profits to members, it reinvests them to further the objectives of the business.
Organization:
-Members: Rather than having stockholders, a Company Limited by Guarantee CLG has members who agree to make a one-time payment (typically a modest amount) in the event that the group is wound up.
-Directors: A Company Limited by Guarantee (CLG) is required to have a minimum of one director, although it is recommended to have more than one.
Select a Name
Conditions
-The name cannot be too close to or identical to an already-existing business.
-Sensitive or prohibited language should not be used unless express authorization has been granted.
-If it is a private business limited by guarantee, it must conclude with “Limited” or “Ltd.”
Availability: Use the search tool provided by your local company registration office to find out if the company name is available.
Get the Required Documents Ready
-Memorandum of Understanding- a declaration endorsing the formation of the company, signed by each original member.
-Articles of Organization- a written statement outlining the rights and responsibilities of directors as well as the company’s operating procedures. The registration office may give model articles, or you may write your own that are customized for the requirements of the company.
Register the Business
Online Enrollment -Online registration is permitted in most jurisdictions. You must:
– Register on the website of the registration office.
-Enter the company’s name, address, directors, and members in the application form.
-Upload the association’s articles and memorandum.
-Commission the registration.
Registration on Paper
Alternatively, you can apply on paper by downloading the forms from the website of the registration office, filling them out, and mailing them with the necessary paperwork and payment.
Register in Taxes– If your company will be involved in taxable operations, you must then register for any applicable taxes, such as VAT, and apply for a tax identification number (TIN).
Open a Bank Account
To handle the company’s funds, open a bank account in its name.
Usually, you’ll need the business’s constitution, the directors’ identity documents, and the certificate of formation.
Maintain Compliance
-Maintain a record of the directors and members.
-Compile annual accounts and keep correct financial records.
-Call regular meetings and keep minutes, such as the annual general meeting.
Annual Reports– Send yearly returns with information about the organization’s finances and structure to the registration office.
Registering Accounts– Annual financial statements should be sent to the appropriate authorities. The requirements for auditing may differ based on the relevant jurisdiction.
Modifications and Updates– Notify the registration office as soon as there are any modifications to the company’s organizational structure, such as a change in directors or members.
In Summary
Careful preparation and compliance with legal regulations are necessary when establishing a company limited by guarantee.
You can create a Company Limited by Guarantee (CLG) that runs efficiently and meets with legal requirements by following these procedures, freeing you up to concentrate on accomplishing the objectives of your company.
For further assistance or to begin the registration process, Contact EBOS Cloud Accountants today!
