The advantages and disadvantages of a Sole Proprietorship are as follows:
- Business structure is easy to set up and suitable for low-risk service providers
- Need not audit accounts or file annual returns with the Accounting and Corporate Regulatory Authority (ACRA).
- Profits are taxed at personal income tax rates
- Business is easy to close/wind up
- Owner is fully liable for his business activities and bears all risks, debts and losses
- Face limited choices in securing funding from banks, might have to put up personal assets as collateral
- Cannot sell a stake of the business to investors in order to raise funds
To learn more about a Sole Proprietorship, including its features, set up requirements, procedure and timeline, please refer to our Guide on Singapore Sole Proprietorship.