What Is Sole Proprietorship Registration?
A Sole Proprietorship in Singapore is the simplest form of business entity that is owned by only one owner. The company owner has absolute authority and responsibility for all assets and liabilities belonging to the business. There is no legal difference between the owner and the business entity, for example, the owner is personally responsible for the debts incurred in the mean of operating the business. It also cannot own a property in its name.
Registration of a Sole Proprietorship can be done easily for a Singaporean or Singapore Permanent Resident; however, for foreigners and overseas companies, they can only register a Sole Proprietorship with the appointment of a local resident manager. It is important to note that foreigners are unable to incorporate a company in Singapore without the assistance of a company registration service provider as well. It is important to find one that suits your needs and is able to provide you with the best support when you set up a company in Singapore.
Who can Register a Sole Proprietorship in Singapore?
- Individuals; a Singapore Citizen, Singapore Permanent Resident, or an Entrepass Holder who is at least 18 years of age
- Corporate; a Singapore registered company
- Foreigners / Foreign Entities
- A local manager who is either a Singapore Citizen or Permanent Resident and is at least 21 years of age
- A registered filing agent for submission of application
What to Prepare Before Registration
- Business Name:
In Singapore, prior to registration, the business name has to be approved by ACRA (Accounting and Corporate Regulatory Authority) before the Sole-Proprietorship can be registered. The requirements of the name are that:
- It is not identical or similar to another existing Business Entity’s Name
- It must not be vulgar, obscene or offensive
- It must not be banned by order of the Minister for Finance
Should the name does not meet any of the requirements stated above; ACRA will reject the proposed business name.
- For Singaporean/ Singapore Permanent Resident – Individual’s Details:
For Singaporean or Singapore Permanent Resident registering for Sole Proprietorship, Singpass is required for the registration. The Individual must not be an undischarged bankruptcy and prior to the registration, the individual must ensure that there is no outstanding amount in his/her Medisave account. These criteria apply for the subsequent renewal of business registration.
- For Foreigners/ Foreign Entities – Managers:
For Foreigners regardless of their residency, they are required to appoint at least one local manager in order to register for a Sole-Proprietorship in Singapore. The same applies to Foreign Entities. It is important to note that the manager to be appointed must be a resident in Singapore which meant that he/she has to be a Singapore citizen, a Singapore permanent resident, a person who holds an Employment Pass, EntrePass, or a Dependants’ Pass. For more information on how to apply for a work pass in Singapore, click here for a detailed guide.
- For Foreigners/ Foreign Entities – Registered Filing Agent:
Foreigners or Foreign Entities looking to register a sole-proprietor in Singapore must engage the services of a registered filing agent such as a law firm, accounting firm, or corporate secretarial firm to submit the application on their behalf. This is due to the fact that foreigners and foreign entities do not own a Singpass account and the application can only be done by individuals with a Singpass or Corppass account.
- Registered Address:
All business entities in Singapore are required to have a registered business address. It must be a physical address in Singapore and do note that a P.O. Box address is not allowed to be used as the registered business address.
- Singapore Standard Industrial Classification (SSIC Code):
The Singapore Standard Industrial Classification (SSIC) is the national standard taken by Singapore for the classification of economic activities undertaken by Singapore Registered Business Entities. In brief, the SSIC code describes the nature of your business activities. A Singapore Registered Entitiy must have at least one SSIC code and a maximum of 2 SSIC codes that best match the nature of their business.
Tools: SSIC Code Search (ACRA)
Why Register a Sole-Proprietorship in Singapore – The Advantages
- The process for registration and cessation of business for Sole-Proprietorships are relatively easy and fuss-free
- Transfer of and Selling off the Sole-Proprietorship can be done easily through a name transfer providing that the new owner is qualified to own and manage a Sole-Proprietorship.
- Compliance requirements are minimal and resolutions are not required for changes in business details hence there is lesser administrative paperwork in comparison to a Private Limited Company.
- Annual General Meeting and Annual Returns filing are not required at every financial year.
- Decision making in Sole-Proprietorships are easy and the only decision-maker will be the owner of the Sole-Proprietor.
- Accounting matters are simplified (Only 4-line statements are required) for Sole-Proprietors with revenue less than S$500,000.
- Profits after deducting all operating expenses belong to the owner who owns the Sole-Proprietorship personally.
- No need for computation of corporate taxes as the profits of a Sole-Proprietorship is taxed at a personal income tax level.
- The Sole-Proprietor is responsible for all debts and losses incurred by the business, which meant that he/she can be sued it his/her own name. Hence, personal assets will be affected during the course of business.
- Registration of the Sole-Proprietorship has to be renewed, the business registration can be automatically cancelled by the Registrar should the Sole-Proprietor failed to renewed the business registration on time.
- Sole-Proprietorship is excluded from tax exemptions and corporate tax rebates which is only applicable to other type of business entities.
How to Register a Sole Proprietorship in Singapore
The entire process can be conducted online via BizFile+. Entrepreneurs can either do so themselves, or engage a company providing Singapore Company Registration Services. WLP group is one of the best service providers in the market, and we are able to provide you with all the necessary support and vital information to quickly and smoothly complete your Company Registration in Singapore. Contact us today if you are interested to incorporate a company in Singapore and need more information, or are ready to take the leap and start a business in Singapore.