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Guide for Sole Proprietorship Business Registration
When it comes to business structures in Singapore, sole proprietorship is the easiest business entity form to go with. But keep in mind, that this entity option is only suitable for small businesses because it only involves a single owner. And because it is a single ownership type of business, you will have no limited liability protection and your assets will not be protected from any business risks that you may face during the course of your business.
What you need to know about Sole Proprietorship
Before getting started on anything new, it is always good to have all the facts in hand so you can make an informed decision. Here are some things you need to know about what it means to own a sole proprietorship business:
- Sole proprietorship is not a separate legal entity, so there is no distinction between the owner and the proprietor
- Sole proprietorship requires you to be 18 years of age before you can register
- Sole proprietorship must have one manager who is 21 years of age and a resident in Singapore
- Sole proprietorship must have a local business address
- Sole proprietorship owned by Singapore residents can only be done if the residents’ Medisave accounts have sufficient funds in them
- Profits under this entity are treated as the income of the owner
- Sole proprietorship cannot register another business because it is not considered a legal entity
- Accounts under this entity do not need to be audited
- No annual returns need to be filed with the ACRA
- Registration of this type of business entity needs to be renewed annually
- This option is best suited to locals, not foreign investors
What documents you will need to register a sole proprietorship
Registering a sole proprietorship will require an investor to have the following documents prepared:
- A proposed name for the intended business
- A description of the business activities
- A local address for running the business
- A copy of the owner’s Singaporean ID
- A local address for the resident
- A compliance declaration and Statement of Non Disqualification
Once a sole proprietorship business has been successfully registered, only then a bank account for the business can be opened. The options for the bank account can be from any of the several international, foreign or local banks that are located within Singapore such as DBS, OCBC, UOB – Comparison of Local banks.
These business bank accounts can be opened as separate accounts of various currencies or have the option of opening as a single multi-currency account, depending on the preference of the owner.
The advantages of owning a sole proprietorship account
A sole proprietorship account is easy to set up because it only involves one primary owner, and it is the least expensive type of business entity to begin. Sole proprietorship gives the owner complete and absolute control of all their business affairs and decision making without having to refer to anyone.
Choosing to terminate a sole proprietorship account is also much easier and less time consuming compared to other larger business entities where more people are involved.
With the exception of having to renew your sole proprietorship registration annually, owners of this type of entity are complete free of any obligation to file any type of returns.
Knowing more about business forms that are available in the market now and having more understanding will help you to choose the right types of business to incorporate. One of the ways to achieve this is through engaging services provider.
Feel free to contact 3E Accounting for more information.