Incorporate a Singapore Company as One of the Strategies of Asset Protection
Did you know that incorporating a company is one of the important steps to ring-fence your business as well as a part of asset protection?
Are Your Business Assets At Risk?
Every business has its own assets and every business assets are (potentially) at risk in an adverse decision, be it due to lawsuit, or natural disaster like fire and flood, or criminal cases like robbery. Nobody anticipates losing litigation, not even a savvy business owner/entrepreneur. Therefore, having a well thought of estate planning in place can protect your assets from litigation.
Understanding a Singapore as Asset Protection
One of the biggest risks small business owners bear is not protecting their personal assets from business liabilities or judgments. When you form a company, you establish a new business entity that is legally separate from its owners. This separation provides what is called limited liability protection.
In other words, if the company cannot pay debts, the creditors can go after the company’s bank accounts and other assets, but the owner’s such as cars, homes and bank accounts are safe. A business owner only risks the invested amount in the business.
A Singapore LLC and LLP have its own legal identity, separate from its shareholders (who own the company) and its directors (who manage the company), which actually implies that:
- The entity can incur and receive obligations and hold property in its own name, enter into contracts with its members, directors, employees and with third parties.
- The entity can sue and be sued in its own name.
- The entity continues unchanged even if the identity of its participants changes.
- The entity can enter into legal relationship with its members or directors.
In addition, LLPs and LLCs in Singapore are setups as limited liability legal entities; their business obligations remain within the entity itself and thus protect their members via the provision of limited liability.
In a nutshell, operating as a sole proprietorship offers zero asset protection but a limited liability company (LLC) or a corporation can shield your personal assets for business lawsuits.
Incorporate a Singapore Company to Protect Your Intellectual Property
Nowadays, we are in a society or marketplace where entrepreneurship is not just about having a sound business plan but also protecting your intellectual property (IP). Singaporean Government recognizes that intellectual property is an important business asset especially in the context of knowledge-based economy. Therefore, if you intend to run a business in Singapore while protecting your Intellectual Property, you can choose to incorporate a Singapore company then register for your intellectual property (IP) rights protection.
A Singaporean company can register IP rights for trademarks, patents, registered designs, copyrights, and plant varieties. All these can be electronically applied via the IPOS website.
If you are expanding your business in Singapore and looking for professional assistance in asset protection or intellectual property (IP) rights protection, please do not hesitate a second to reach out to us!