A branch office, considered as a legal extension of a parent company is generally formed to increase the effectiveness of the latter, particularly when it comes to accumulating revenues. Controlled and managed by the parent company, which headquarters may be offshore or just within a state, branch offices are not seen as an independent entity with legal existence.
Hence, a branch office does not enjoy the benefits mostly indulged upon a company, including tax exemptions and limited liability. When liability is incurred by the branch either by omission or commission, the parent company is responsible and can be brought to a court for a legal proceeding.
For better understanding, Asiabiz Services business consultant, Chi Han highlights on the characteristics of a branch office. She says that branch offices bear the name of their parent companies unless when it is undesirable, identical, or prohibited by Singaporean authorities.
In such case, ACRA shall direct the company to register a new name for its branch office in Singapore.
Although, it is designed to support the commercial activities of its parent company, a Singapore branch office must pursue the activities of its parent company except when it has a different purpose, which must be clearly specified on its Memorandum and Articles of Association, continues Han, referring to branches devoted to warehouses, customer support service center, authorized service center, or industrial plant.
Included in the MAA are information about its shareholders, directors, and agents. The Companies Act of Singapore suggests that a parent company shall employ two agents, both local and foreign, to do administrative tasks including receiving official notices served by authorities and all matters relating to a branch office.
Han adds that while the parent company is directly responsible for the losses and violations of its branch office, the agents are also personally accountable for all penalties imposed upon the branch office due to breach of law or act.
Agents must be local such as a permanent resident or a citizen of Singapore. By holding a working visa like Employment or Dependant pass, foreigners are eligible to occupy the position of an agent as well. Sometimes, local or foreign companies cannot immediately satisfy the requirement of an agent. In such case, Chi Han has the ideal solution.
Asiabiz Services provides the nominee agent service so investors can proceed with the registration of a branch office, Han explains, depending on the agreement, the nominee agent may be temporary until the qualified individual is ready to take that post or it could also be on a long-term basis.
Whichever is the case, Han reminds that the nominee agent is for statutory compliance only. The person must not be legally responsible for anything related to the branch office or its parent company.
Asiabiz Services offers other corporate solutions like company registration including branch, subsidiary, and representative office, and application for working visas and accounting services.
About the Publisher:
Asiabizservices offers one-stop business solutions to companies, particularly, those that are managed and owned by foreign investors. Since its inception, Asiabizservices has successfully helped foreign entrepreneurs form a Singapore company. Among its specializations are Singapore company setup, corporate services, accounting services, nominee services, company registration, whether as a sole proprietorship, private limited, limited liability partnership; offshore company formation, incorporation of foreign companies either as a branch or subsidiary office, accounting services including payroll preparation and more.
Asiabizservices is the leading provider of Singapore Company Incorporation services and has successfully helped thousands of both local and foreign entrepreneurs incorporate a Singapore Company. It also provides chartered secretarial services.
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