Singapore Sole Proprietorship Registration Guide
Singapore sole proprietorship registration is a simple process. If you have the required documents, it can be finished in a couple of hours. Individuals with innovative business ideas and the guts to make it big should opt for it.
A sole proprietorship is a great business launch pad for the newbie entrepreneurs to start their own businesses. It assists them in being acquainted with the realities of the market and in knowing how to survive the fierce competition.
Registering a Sole Proprietorship in Singapore
It does not matter whether you want to register a sole proprietorship or a private limited company; every business entity has to be registered with the ACRA (Accounting and Corporate Regulatory Authority). A sole proprietorship is not a corporate entity, and the owner usually carries all the ownership of its debts and liabilities.
What is a Sole Proprietorship?
A sole proprietorship is a business firm, owned by a person or a company. There are no partners. Once the Singapore sole proprietorship registration is done, its owner has the absolute say in the running of the business.
Under the Business Registration Act, Cap. 32, a Singapore sole proprietorship registration can indulge in every form of trade, commerce, craftsmanship, calling, profession and any activity carried on, for the purposes of monetary gains but, it does not include any office, employment or occupation.
Characteristics of a Sole Proprietorship
- It is not a separate legal entity from its owner
- It cannot sue or be sued in its own name
- The owner has unlimited liability and is responsible for the firm’s debts and losses
- It cannot own properties in its own name
Advantages of Registering a Sole Proprietorship
- It is economical, fast and simple than registering a Singapore company
- Easy to manage, its owner is the only decision maker
- The compliance requirements are not that harsh
- Closing this form of business is easier than closing a private limited company or a partnership
Disadvantages of Registering a Sole Proprietorship
- The owner’s personal assets are used to pay, if it comes to that, the debts and losses of sole proprietorship
- The firm depends on the owner for identity
- Its existence is not perpetual and ceases with the death of its owner
- Additional capital for expansion is difficult to raise. The owner’s reputation with the banks or investors matters
- The sole proprietorship registration must be renewed annually, and the owners need to top up their CPF accounts
Required Registration Documents
- Approved name of the proposed business
- Details about the principal activities
- Registered local business address with proper permissions
- Copy of the owner’s Singapore ID
- Singapore address of the owner
- Declaration of compliance and Statement of Non Disqualification
Process for Registering a Sole Proprietorship
To start a sole proprietorship in Singapore, approach SBS Consulting. We will initiate the effort to ensure the trouble-free registration of your firm.
Singapore Taxation for Sole Proprietorship
A sole proprietorship is a business firm, rather than a corporation and hence, does not qualify for the tax rebates, exemptions, or the incentives offered to Singapore registered companies. In addition, its income is that of its owner who needs to pay personal income tax (0% – 22%) on it. On the other hand, Singapore corporate income tax ranges from 0% – 17%.
Before You Apply for the Registration of a Sole Proprietorship
From 1 January 1994, all self-employed persons are required to top up their Medisave accounts with the CPF Board before they register their firms or renew their registrations. This requirement is only applicable to Singaporean citizens and permanent residents interested in Singapore sole proprietorship registrations.