A Sole Proprietorship is the simplest form of business entity with only one owner who is the decisive authority and responsible for all assets and liabilities belonging to the business. Singapore citizens or permanent residents; holders of Employment Pass, EntrePass or Dependant’s Pass may register a Sole Proprietorship. Foreigner individuals and companies may also register a Sole Proprietorship but must appoint a local resident manager.
Features of a Sole Proprietorship
- It does not have a separate legal entity
- The owner has unlimited liability
- It cannot own property
Advantages
- No annual returns filing required of a Sole Proprietorship as income is taxed at personal income tax rate.
- Very few compliance requirements and written documentation
- The business itself is flexible. Any decisions and changes can be made easily as there is only one person to make the relevant choices.
- All the profits generated by the business will belong to the Sole Proprietor.
- Sole Proprietor own his business and so are able to sell or transfer it as he wishes.
Disadvantages
- A Sole Proprietorship has unlimited liability. This means that the Sole Proprietor is responsible for all debts and losses of the business, which can put all personal assets at risk.
- In the event of a business failure, the creditors can sue the sole proprietor for all debts incurred.
- As there is only one person with overall responsibility for the success of the business this may increase the pressure on that individual.
Summary of Setup Requirements for a Sole Proprietorship
- Minimum one owner
- A Singapore registered office address
- For foreign individuals and companies only: minimum one manager who must be a Singapore resident
Rikvin is Singapore’s leading specialist in registration of businesses with ACRA. We can set up your Sole Proprietorship in less than one hour provided you have all required documents in order.
Approval and Renewal Information
Rikvin can help you register a Sole Proprietorship with ACRA within one hour provided all required documents are in place. Once approved, ACRA sends out a confirmation of registration via email. The registration is valid for one year and subject to an annual renewal.
Related Topics
Singapore Personal Income Tax
Post Incorporation Consideration
