Singapore Standard Industrial Classification ,SSIC ,Principal business activities ,Incorporation ,Guide August 07, 2019
Is it mandatory to specify business activities for a Singapore-incorporated company?
Following the Companies (Amendment) Act 2004, the Objects Clause, which states the company’s purpose and the range of activities to be carried out by the company, is no longer mandatory to be specified in the Memorandum of Association (The Memorandum of Association was merged with the Articles of Association to a single document called Constitution under the Companies (Amendment) Act 2014).
While the Objects clause is no longer mandatory, the Constitution can choose to specify the restricted activities that the company should not be involved in. However, it is important to note that the Ultra Vires doctrine does not apply in Singapore, as third parties are not expected to be aware of the restricted activities in the company’s Constitution. As such, any contracts entered by the company are considered valid even if they contradict the restricted activities in the Constitution. In such cases, the directors of the company can be held liable for violating the company’s Constitution.
Currently, business owners will be required to specify up to two principal business activities when incorporating a company with the Accounting and Corporate Regulatory Authority.The activities can be chosen from the list specified in the Singapore Standard Industrial Classification (SSIC) administered by the Department of Statistics Singapore.
Regardless of the two principal activities declared, companies have the freedom to conduct business activities of other natures. However, companies should choose SSIC codes that accurately describe their primary activity. For example, only holding companies should choose SSIC code 64202 ‘Other Holding Companies’. The Inland Revenue Authority of Singapore (IRAS) may use the SSIC code for tax assessment purpose. Holding companies are taxed more restrictively by IRAS and do not enjoy tax exemption for new start-up companies nor most of the regular tax deductions.
In addition, companies should note that the two SSIC codes chosen during incorporation are important when applying for government licenses. For example, to get remittance license from the Monetary Authority of Singapore, a company should choose SSIC code 64994 ‘Remittance Services’.
For more details on business activities and industrial classification, please refer to the link here from the Department of Statistics.
You can also use the link here to find SSIC code corresponding to your business activity.