The application of a causal dynamical observer-based controller for a linear time-invariant square singular system is considered. Sufficient conditions which constructively yield an approach for obtaining a reduced-order causal compensator that stabilizes the system, eliminates impulsive modes and estimates the system' s state have been established. In particular, the present approach establishes a clear and useful relation between the structure and the dimension of a minimal order compensator for state-space and singular systems, and generalizes the separation property in an obvious way