3 reasons why your company incorporation can be denied by ACRA

3 minute read

Numerous entrepreneurs have moved to Singapore to set up a business and most of them have found their luck in this beautiful country.

Singapore takes pride in the fact that it is among the top-notch business hubs in the world where business owners enjoy great conditions and considerably lower taxes and fees when compared to other parts of the world.

However, even though incorporating a company in Singapore is rather easy and convenient, it does not mean that all procedures always go smoothly.

Sometimes companies get rejected by ACRA and fail to incorporate. Let’s see the three main reasons why this happens.


Company name not approved

According to Singaporean law, an entity that wants to carry on business activities in Singapore has to register a business.

In order to do so, a company has to find a name that isn’t already taken. Before your registration can be completed, you have to reserve a proposed business name for the business with ACRA online. Reserving a name for a sole-proprietorship or partnership falls under the Business Names Registration Act.

The reservation of a name for a company, limited liability partnership, or limited partnership is under the Companies Act, the Limited Liability Partnerships Act, and Limited Partnerships Act, respectively.

There are a few reasons why the Registrar rejects a proposed business name. These include:

  • Undesirable meaning
  • Same as the name of another business
  • Same as another reserved business name
  • Minister of Finance can order the Registrar not to accept the name.

Failure to have the required number of shareholders

Singaporean laws stipulate that a private limited company has to hold a minimum of 1 shareholder, while it cannot exceed a maximum of 50 shareholders.

Shareholders can be real individuals or corporations, as well as local or foreign. On top of that, Singapore allows for 100% company ownership by foreign shareholders.

In order to become a shareholder, you have to first purchase shares of the company. However, the company, in this case, is a separate legal entity and the shareholder does not hold any assets of the company nor is the person liable for the debts of the company.

Furthermore, shareholders are entitled to a certain set of rights, since they are owners of the company. Of course, with these powers come various responsibilities and shareholders should be aware of that.

No registered address in Singapore

In order to keep your business compliant with Singapore laws and incorporate it successfully, you have to find office space and have it registered for your company. This is mandated under Section 142(1) of the Companies Act, Cap. 50.

A registered office address has to meet the following requirements:

  • It cannot be a PO box address.
  • The address must be a physical office address in Singapore.
  • It has to be a place where all communication and notices may be addressed and it must be open and accessible to the public for not less than 3 hours during ordinary business hours on each business day.

Keep in mind that your business will receive mail from government entities. These can be reminders on annual requirements, new incentives, and also mail from banks. So, check your mail regularly if you do not want to miss out on important information.

Finally, if you live in Singapore, you can use your home address as the registered office address. However, this is done under the Home Office Scheme with URA or HDB.

Keep in mind that there are certain requirements that need to be met in order to register your home address as the address of your business. If you fail to meet these requirements, you could easily have your permit revoked.

Final thoughts

If you want to avoid these mistakes that could get your business rejected by ACRA, it is advised to turn to a proven service provider that has already incorporated numerous businesses before.

Sleek has been working in this field for years and we take special pride in the fact that many satisfied clients are reaping maximum rewards by working from Singapore. For professional incorporation services, reach out to us.

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