Opening a Company Limited by Guarantee / Non-profit Organization in Singapore
This page covers information on opening a company Limited by Guarantee (CLG) and Non-Profit Organization (NPO) in Singapore, including the basics of the registration process, fees, annual filing requirements, and tax requirements. Contact us at Hub for additional information on opening a company.
Company Limited by Guarantee (CLG) : Introduction & Key Features
What is a Company Limited by Guarantee (CLG)?Â
A Company Limited by Guarantee (CLG) is a type of Non-Profit Organization that uses to carry out non-profit making activities such as charity work, education, research, or sports. It is a legal form of organization that is suitable for non-profit activities in Singapore. It does not issue shares and its members do not own any stake in the company. Instead, the members agree to pay a certain amount to the company’s creditors if the company is dissolved. A CLG is suitable for Non-Profit Organizations that have large-scale or complex operations and require a separate legal identity
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Key Features
- A Company Limited by Guarantee (CLG) is a type of company that does not have share capital or shareholders, but instead has members who act as guarantors and agree to contribute a nominal amount (usually S$1) in the event of winding up.Â
- The CLG can own property, enter into contracts, sue or be sued in its own name, and apply for charity or Institution of a Public Character (IPC) status if it meets the criteria.
- It does not have share capital and its members are not shareholders.
- They must register with the Accounting and Corporate Regulatory Authority (ACRA), which is the national regulator of business entities and public accountants in Singapore.
- CLGs do not permit providing profits or dividends to their members.
- CLGs do not require share capital. Instead, the liability of the company’s members is limited to the number of assets they commit.
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Incorporate a CLG Package
- Includes all government fees & charges
- Name application & reservation
- 12 months Company Secretary
- Founders Board of Directors Resolution
- Model Constitution & Bizfile
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Company Limited by Guarantee (CLG) : Requirements and Tax Exemptions
Tax Exemptions
A CLG / NPO is liable to pay corporate tax at the prevailing rate of 17% on its income unless it qualifies for tax exemption. The organization can apply for a tax exemption if it meets certain criteria and obtains charity status from the authorities. To qualify for the tax exemption, the entity must meet the following conditions:
- It must register as a charity with the Commissioner of Charities (COC) or as an IPC with the relevant Sector Administrator (SA).
- It must have exclusively charitable objects that are beneficial to the community in Singapore as a whole, and not confined to sectional interests or groups.
- It must use its income and assets solely for its charitable purposes and not distribute any part of them to its members.
- It must comply with all the regulatory requirements imposed by the COC, SA, ACRA, and IRAS.
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Compliance Requirements
- There should be at least three members on the governing board, two of whom should be Singaporean residents. .
- The CLG must define its goals and purposes, including what the members want to accomplish with the organization.
- It must maintain a registered office address in Singapore where all official communications and notices can be sent.
- The Accounting and Corporate Regulatory Authority (ACRA) regulates a CLG, which must comply with the Companies Act and other relevant laws.
- A CLG is subject to corporate tax at 17%, unless it is granted charity or IPC status, which entitles it to tax exemptions and deductions.
- Within three months of incorporation, the organization must appoint a company auditor.
- Within six months of incorporation, the CLG must appoint a company secretary.
- Every year on December 15th, the entity should file the organizations tax returns.
- The corporate secretary must file annual returns with ACRA within 30 days of holding its annual general meeting (AGM).
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