Sole Proprietorship in Singapore
2 minute read
A Sole Proprietorship is a type of business that has only one owner who manages all of its assets and liabilities. A Singaporean Citizen or a Permanent Resident may register a Sole Proprietorship. A Sole Proprietorship is not considered a separate legal entity. Owners are legally responsible for all liabilities against the firm.
- What is a Sole Proprietorship?
- Who can register for a Sole Proprietorship in Singapore?
- Advantages of a Sole Proprietorship
- How to close a Sole Proprietorship in Singapore
- How to convert a Sole Proprietorship to a Private Limited Company
What is a Sole Proprietorship
This is a single-owner type of business when the owner is personally accountable for debts and liabilities incurred on the business activities. A Sole Proprietorship can be registered in the name of a natural person over 18 years of age or a Singapore registered company.
A Sole Proprietorship in Singapore is required to appoint at least one manager aged 21 years or more and he/she has to be a resident in Singapore. He may be a Permanent Resident or a Singapore Citizen. Typically, the owner acts in this capacity.
Who can register for a Sole Proprietorship in Singapore?
The following can register for a Sole Proprietorship in Singapore:
- Singapore Citizen
- Permanent Resident (PR)
- EntrePass Holder
The person registering has to be 18 years old and above.
Advantages of a Sole Proprietorship
There are a few advantages of registering a Sole Proprietorship in Singapore:
- The sole proprietor enjoys all profits.
- A sole proprietor can sell or transfer the business as per his wish.
- Profit is taxed at the personal income tax rate and there is no corporate tax.
- A sole proprietorship business is easy to administer and manage.
- There are minimum administrative responsibilities and compliance requirements for a sole proprietorship.
How to close a Sole Proprietorship in Singapore
To close a Sole Proprietorship, a sole proprietor must notify ACRA about its decision to cease all business operations. The company must log in to BizFile+ using their Corppass, for the “Cessation of Business” transaction online. The business will stop functioning immediately after the cessation application has been submitted.
How to convert a Sole Proprietorship to a Private Limited Company
The owner of a Sole Proprietorship firm must write a letter stating that they have no objection using the business name for a Private Limited Company.
You can start a Singapore company with the following setup requirements:
- One company secretary
- One shareholder
- A local registered office address
- One Singapore resident director
- S$1 as paid-up share capital
Additionally, all business assets must be transferred to the newly incorporated company. It is important to immediately transfer assets from an existing business to the new company and close the Sole Proprietorship within a period of three months. Take note of the following:
- Open a new bank account under the Singapore Private Limited Company. Hereafter all checks and bank transfers must be made in the name of the Private Limited Company.
- Re-sign the contracts, leases, or service agreements that were previously signed under the Sole Proprietorship.
- Re-apply new licenses and permits that are not transferable otherwise.
Finally, ACRA is then informed about the termination of the sole proprietorship.
Well it’s simple! If you have any questions about getting your business started, get them all answered by having a free consultation call with our experts.