All entrepreneurs or investors who are looking to conduct business activities in Singapore are required to set up company in Singapore such as a sole proprietorship, partnership, limited liability partnership or a private limited company.
For small businesses in Singapore, one of the most common entity types in company registration Singapore is a sole proprietorship company. It is the simplest and easiest form of entity to set up in Singapore. This simple how to set up company in Singapore guide intends to provide information on the process of company registration Singapore.
What is a Sole Proprietorship in Singapore?
The process to incorporate company in Singapore is simple because according to strict laws and regulations, only one owner is needed to set up company in Singapore. In addition, the process of company registration Singapore for a sole proprietorship is suitable for businesses that are smaller in scale and do not carry any risks during the course of business. For example, a repair shop with less than five employees would be most suitable to be incorporated as a sole proprietorship.
However, it is important to note that as a sole proprietor, you will not have limited liability protection and in situations of lawsuits or liquidation, your personal assets will not be protected and can be affected during the course of business. This is something that your company registration Singapore consultant should warn you before you go through the process to incorporate company in Singapore as a sole proprietorship due to your personal assets being at risk (in the event that you take on debt in your business).
Key Features of a Sole Proprietorship in Singapore
Here are some key features of a sole proprietorship that you will need to know before company registration Singapore:
- In Singapore, a sole proprietorship, unlike a private limited company, is not a separate legal entity; there is no distinction between the business owner and the proprietor hence should there be liabilities or debts incurred during the course of business, the proprietor of the Singapore company will be personally accountable for.
- The sole proprietor in Singapore must be a natural person who is at least 18 years of age when going through the procedure to incorporate company in Singapore as a sole proprietorship.
- Singapore Citizens or Singapore Permanent Residents who wish to register for a sole proprietorship must ensure that their Medisave accounts have sufficient funds.
- The sole proprietorship must have at least one manager who is a natural person and is at least 21 years of age. The manager has to be a local resident in Singapore – A Singapore Citizen or a Singapore Permanent Resident. Foreigners are not allowed to set up company in Singapore without the help of a professional service provider.
- All sole proprietorship in Singapore must have a business address based in Singapore. Prior to starting to incorporate company in Singapore, note that residential addresses are accepted for business usage subjected to approval from the Housing Development Board (HDB) for public housing or Urban Redevelopment Authority (URA) for private housing.
- All profits generated from the sole proprietorship are recorded as income of the owner, and is therefore taxable at the tax rate as that of personal income taxes.
- Sole proprietorships are not required to audit their business accounts and there are no set up company in government requirements to file the business’s annual returns with the Accounting and Corporate Regulatory Authority (“ACRA”).
Where and how to Incorporate Company in Singapore
The process of incorporate company in Singapore, including a sole proprietorship, is done online under the Singapore government Bizfile portal. The set up company in Singapore process includes reserving the business name and filling up the details required. Company registration Singapore of the sole proprietorship is usually fuss-free and can be completed within an hour but depending on the nature of business, it may take up to weeks if it requires special approval from other relevant authorities.