You may wonder whether it is mandatory to have clear-cut objectives about your business activities when incorporating your company. However, the 2004 Amendment Act of Singapore has made lives easier ever since it got updated. It now states that you do not need to particularize your objects in The Memorandum of Association. The Memorandum of Association is not required anymore as it has been integrated with the Articles of Association. Together, both of them form what is now called The Constitution. The Constitution doesn't demand business activities to be highlighted anywhere. This makes every legal commercial activity eligible in Singapore!
Two activities must be included when incorporating into a company – How?
The process of incorporating into a company will ask you to identify two major business activities. There is a list of commercial activities provided in the Singapore Standard Industrial Classification (SSIC). This list can help you select a relevant business objective. However, the business is not restricted to follow those activities strictly. You can perform any task regardless of whether it is relevant to your mentioned activities. The location of the SSIC codes will matter more when you would want a government license. For example, a Recruitment company should choose ‘SSIC code 78104 – Employment agencies’ to get the Employment Agency license from MOM.
Choosing an SSIC Code – Things to Remember
When you choose the codes, select a code that is directly related to its license. For instance, fintech companies usually choose ‘SSIC Code 64994 Remittance services' since it can be associated to the Monetary Authority of Singapore to obtain a remittance license.
The codes must precisely outline the major activity of your business. For example, ‘SSIC Code 64202 – Other Holding Companies’ should be used correctly since holding companies are taxed in a limited manner by the Inland Revenue of Singapore (IRAS). They are observed greatly by banks when their corporate account openings take place.
Rather than giving a detailed description of the objectives in your business profile on ACRA (Accounting and Corporate Regular Authority), it is recommended to provide it in a single sentence form.
Instead of sticking to the SSIC code’s standard description, you can also describe your business more clearly in your own words.
The inclusion of Objects Clause in The Memorandum of Association
Luckily, you are given the choice to insert an Objects clause. You can set your list of activities according to yourself as well. For example, the activities your company would never be involved in could be mentioned. These lists help to inform the directors of the company what they are allowed and what they are not permitted to do. However, regardless of having a list of objects, companies are still free from the Ultra Vires Doctrine in Singapore. This means your company is eligible to enter any contract, even if it goes against the provided list of activities. This is because there is no third party present. However, the directors of your company can be punished for breaching its constitution.
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