Is it mandatory to specify business activities for a Singapore-incorporated company?
Following the Companies (Amendment) Act 2004, the Objects Clause — which stated a company’s purpose and the range of activities it could carry out — is no longer mandatory in the Memorandum of Association. (The Memorandum of Association was merged with the Articles of Association into a single document, the Constitution, under the Companies (Amendment) Act 2014.)
While the Objects Clause is no longer mandatory, a company’s Constitution can still specify restricted activities that the company should not carry out. The consequences of acting outside those restrictions, however, fall on the company’s officers rather than on the counterparty. Third parties are not expected to know what a company’s constitution restricts, so a contract the company enters into is not void merely because it breaches those restrictions. The directors can instead be held liable for the breach.
Principal Business Activities
Business owners are currently required to specify up to two principal business activities when incorporating a company with the Accounting and Corporate Regulatory Authority (ACRA). These activities are 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 remain free 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 a company’s SSIC code for tax assessment purposes. Holding companies are taxed more restrictively by IRAS and do not enjoy the tax exemption for new start-up companies, nor most of the regular tax deductions.
The two SSIC codes chosen at incorporation also matter when applying for government licences. For example, to obtain a remittance licence from the Monetary Authority of Singapore, a company should choose SSIC code 64994, “Remittance Services.”
Finding the Right SSIC Code
For more details on business activities and industrial classification, refer to the Department of Statistics’ SSIC page. You can also use ACRA’s guide to finding the right SSIC code to find the SSIC code that corresponds to your business activity.