A sole-proprietorship is a business owned by one person or one company. There are no partners. The sole-proprietor has absolute say in the running of the business.
Single Ownership – A sole proprietorship can be own by one person and one company only.
Legal Status – A sole proprietorship is not a separate legal entity hence can sue or be sued in individual’s own name. Can also be sued in business name. Owner has unlimited liability. Owner personally liable for debts and losses of business. Can own property if individual has legal capacity.
Personal income tax rates – Profits are taxed at personal tax rates
Quick and easy set up
Because of its simple structure. Sole-proprietorship is easy to setup and maintain. Many low-risk services, such as writer, small retailers and designers begin with Sole proprietorship.
Easy to administrate and manage
Sole-proprietors do not need to audit their accounts or file annual returns. It’s more easier to manage since the owner is the sole decision maker.
Exclusive use of profits
A sole-proprietorship owner receives all his business profits.
Owner of sole-proprietorship is personally accountable for all debts and losses. The owner need to sell off personal assets (e.g. house, car, etc.) to pay off debts and losses. Sole-proprietorship should be avoided when business involves big risks and possibly huge losses.
No tax exemption
Sole-proprietors currently cannot enjoy the three years taxable income tax exemption offered to Company.
Limited funding power
Borrowing powers for sole-proprietors are more limited. The owner has to put up his/her own personal assets as collateral to secure loan. The owner also cannot raise funds by selling a stake in the business.
Business name must be approved before the incorporation of a sole proprietorship may occur and the name must be in English.
Bad names might be rejected by Singapore authority:
Identical or too similar to another business name/existing trademarks.
Cannot contains offensive or vulgar word.
All singapore registered company must provide a local Singapore address as the registered address of the company. The registered address must be a physical address and cannot be a PO Box.
Any individual Singapore Citizen/Singapore PR/EP holder/DP Holder must above 18 years old can be the ownership of a sole-proprietorship. If owner(s) not resident in Singapore, they must appoint a local manager who is resident in Singapore. Self-employed persons must top up their Medisave account with the CPF Board before they register a new business name, become the registrant of an existing business name, or renew their business registration. Un-discharged bankrupts may not be allowed to register business registration without court or Official Assignee’s aproval
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