A Singapore Sole Proprietor is a type of businessman who handles full authority and responsibility for all assets and liabilities belonging to the business on his own. Sole proprietorship is a form of business entry that can be used by Singapore citizens, permanents residents, holders of Employment Pass, EntrePass or Dependant's Pass. A foreign individual can also be a Singapore Sole proprietor. However, a foreign individual or company will need to hire an authorized business registration firm such as Rikvin to assist them with the formation of Sole Proprietorship with ACRA.
Here are some of the common characteristics of Sole Proprietorship:
The owner has unlimited liability
It does not have a separate legal entity
It cannot own property
Moreover, here are the common advantages if you will choose Sole Proprietorship:
No annual returns filing required of 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 owns his business and so are able to sell or transfer it as he wishes.
On the other hand, these are the disadvantages of Sole Proprietorship:
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.
If you are a Singapore resident and you want to set up Sole Proprietorship, you will need to do the following:
Minimum one owner
A Singapore registered office address
For foreign individuals and companies only: minimum one manager who must be a Singapore resident
Important Notes
Engage Rikvin to assist you with the registration of a Sole Proprietorship with ACRA.
Go to Services and Fees and order an incorporation package.
You can also drop in at our office and we can help you register with ACRA in less than hour. Please see Checklist for documents required for registration of a Sole Proprietorship.