Overview of Sole Proprietorship Registration in Singapore
Singapore has been the most favoured destination for entrepreneurs seeking to enter the business or for existing businessmen seeking to expand their business globally. Singapore's strategic location, simplified single-tier tax structure, low taxes, high standards of living, politically stable environment, and hassle-free registration process for sole Proprietorship make it an even more attractive destination for businesses globally. Moreover, Sole Proprietorship is popular as a business model and is preferred by those clients that have a lower risk profile and cater to the business needs of a smaller customer base. The registration of Sole Proprietorship in Singapore is governed by the Business Names Registration Act (BNRA), 2014. The Business Names Registration Act (BNRA), 2014, came into force in 2016 and replaced the erstwhile Business Names Registration Act (BNRA). Under the given act, every individual or business entity aspiring to carry out their business activities has to register their business name. However, individuals or entities carrying out their business activities under their name are exempted from registering their name under the Business Names Registration Act (BNRA).
Sole Proprietorship as a business entity has been successful in small ventures like freelance makeup artists and lawyers setting up their independent practices. Even a Multinational Corporation like Amazon started as a sole proprietorship in the 1990s.
Advantages of Sole Proprietorship Registration in Singapore
Cost effective process
Since a minimal registration fee of $65 is required for a sole proprietorship registration in Singapore, it has been the most favoured business model by entrepreneurs with a low-risk profile.
Simplified and hassle-free process of registration
Due to the simple process of registration and minimal paperwork, many small entrepreneurs choose to opt for sole proprietorship registration rather than other business models.
Due to no interference from the partners, the autonomy and independence of the sole Proprietorship have been preserved.
Sole Proprietorship in Singapore
Legal status of sole Proprietorship
A Sole proprietorship is not a separate legal entity, i.e. it is not distinct from the owner/proprietor. The owner of the Sole Proprietorship has unlimited Liability, which means that the owner is completely liable for all the losses and the business risks that may occur as a part of the business transaction. The Sole Proprietorship can sue or be sued in the owner's name.
No perpetual succession
Since there has been no tight separation between a sole proprietorship as an entity and its owner, in case of the sudden demise of the owner, the operations of a sole proprietorship come to a halt.
Structure of Sole Proprietorship
A sole proprietorship usually has a smaller customer base, low risk, and low profile. Often, it has been witnessed that some of the sole proprietorships are started in pursuit of a hobby. As a result, a lesser labour force is employed in a sole proprietorship firm. It usually consists of a single owner, a Manager to oversee the small customer base, and an Authorized Representative of sole Proprietorship in the case where the owner is a foreigner.
Winding up of a Sole Proprietorship
The sole Proprietorship can be wound up on an application made by an owner of a sole proprietorship or an authorized representative by filing a Notice of Cessation before the Registrar. In case of expiration or non-renewal of registration of sole Proprietorship, the Registrar may order it to close down its business operation.
Features of Sole Proprietorship Registration in Singapore
Now, let us navigate through the intricacies of a sole proprietorship registration in Singapore
- The owners of a sole proprietorship have unlimited Liability, i.e. owners are personally liable for all the debts incurred
- There is no sharing of profits and losses incurred as there is only a single owner
- The ownership of a sole proprietorship cannot be transferred as a whole. However, the assets of a sole proprietorship can be transferred individually
- The cost of setting up a sole proprietorship in Singapore is very low
- The procedure to wind up a sole proprietorship in Singapore is quite easy. It involves some procedures for issuing a notice of termination along with a notice of cessation to registration authorities
- Lower operational risk
- Independent operations
- Lower tax rates
- High level of privacy and confidentiality concerning business transactions
- No capital investment is required
- Limited Legal formalities compliance
- Minimal compliances and follow-up post-registration of sole Proprietorship make it even more attractive for first-time entrepreneurs
- Due to single ownership and no presence of partners, there is no profit sharing in sole Proprietorship
- Winding up a sole proprietorship is easier and less time-consuming compared to other business structures
- There is no need to file annual income returns
- There is no need for an audit of accounts
- The cost of running and maintaining a sole proprietorship is low due to the workforce involved
Sole Proprietorship Registration in Singapore
A Sole Proprietorship Registration in Singapore with the Accounting and Corporate Regulatory Authority (ACRA) of Singapore. All the applications for the registration of a new Sole Proprietorship company have to be submitted online via ACRA's electronic filing and information retrieval system, BizFile+.
First, you have to log in to the BizFile+ portal. Then, you have to engage a registered filing agent to apply on behalf of the proposed owner. The proposed owner, along with the authorized representative, must endorse their consent on the BizFile+ portal.
The total cost of a sole proprietorship registration in Singapore is around $115, which includes a $100 registration fee and a $15 name application fee. There are various payment options available for you, namely Credit card/debit card, Apple Pay, Google Pay, and PayPal.
Sole Proprietorship Formation in Singapore
Sole Proprietorship Registration in Singapore is quite an easy task. Some prerequisites have to be followed for a Sole Proprietorship Registration in Singapore. Our team of qualified legal experts and company secretaries at Enterslice shall help you comply with the given prerequisites with ease.
For instance, the proposed owner of the said Sole Proprietorship must be at least 18 years old, the proposed owner of the said Sole Proprietorship must be an ordinary resident or permanent resident of Singapore or an eligible FIN holder with a local address of Singapore for correspondences related to the sole Proprietorship be given, and the Proposed owner must ensure that his/her Medisave account has sufficient funds in case an owner is a self-employed person.
Registration is normally approved within 15 minutes of payment of registration fees. Processing time takes somewhere between 14 to 60 days if the application is referred to a specific department for approval. For instance, if the proposed sole Proprietorship is to carry out activities in the health sector, then it would be referred to the Health Ministry of Singapore.
Services Offered by Enterslice
We at Enterslice have experience in 1000+ successful sole proprietorship registrations in Singapore. Our Singapore Business Incorporation Desk offers the following service packages to our clients
- Business Model Evaluation: We at Enterslice first evaluate your business needs, values, and future vision, based on which we provide a personalized business model for your business venture.
- Eligibility Check: Before your sole Proprietorship registration in Singapore, our team will ensure that it falls within the eligibility list as prescribed by the Accounting and Corporate Regulatory Authority (ACRA).
- Comprehensive Sole Proprietorship registration process: At Enterslice, we offer you a step-by-step solution right from choosing your business name to the successful sole Proprietorship registration on the BizFile+ portal in line with ACRA's regulations.
- Ongoing compliances: Our robust panel of Legal experts at Enterslice will help you keep up with the latest laws and regulations in line with the Business Name Registration Act, 2014, and the ACRA guidelines.
- License and Permits: Our team will make sure that your proposed sole Proprietorship acquires all the licenses and permits that are needed for business.
- Preparing all the paperwork related to Paper works and maintaining the checklist
- Ensuring the post-registration compliances
- Our expert panel of Accountants will guide you in filing the tax returns of your proposed sole Proprietorship.
- Setting up of bank account: After the registration process is completed on the BizFile+ portal, our team will help you set up a bank account in Singapore under the name of your proposed sole Proprietorship.
- Consultation: Legal Consultation and advisory services tailored to your sole Proprietorship's business needs throughout the process.
Sole Proprietorship Registration: Authorized Representative
An authorized representative is appointed on behalf of the foreigner staying out of Singapore if the proposed owner of a sole proprietorship is residing out of Singapore or if all the partners in the case of a partnership are residing out of Singapore.
To qualify to be appointed as an authorized representative, such a person must be a natural person, at least 18 years of age, a local resident of Singapore, and of full legal capacity. To appoint an authorized representative, go to Bizfile > eServices> Business (Sole proprietor/Partnership)> Change in Business Information, including Appointment/Cessation of Business Owner/Authorised Representative. It is pertinent to mention here that an endorsement by the appointed authorized representative is also required during the registration.
Checklist for Sole Proprietorship Registration in Singapore
Our team at Enterslice has prepared a comprehensive list of the necessary papers for your dream sole Proprietorship Registration in Singapore to ensure a hassle-free experience for you. The necessary papers required for sole proprietorship registration in Singapore have been mentioned below for your perusal.
Firstly, before registration, you need to apply with ACRA to have your business name approved. A minimal fee of $15 is charged for this. You must comply with the provisions of the Business Names Registration Act of Singapore while selecting your business name.
Secondly, while filing the registration application with the ACRA, the description of the nature of the business and the residential address of the proposed owner must also be specified. To open the bank account in the name of Proprietorship, you must have a copy of the Singapore ID of the owner.
Sole Proprietorship Registration in Singapore Pre-Requisites
Choosing a name
Conduct a name search on the BizFile+ portal to ascertain if the proposed name for the sole Proprietorship is available or has already been taken up. The proposed names shall be rejected if it is
- Vulgar or offensive
- Identical to the name of an existing business
- Prohibited by an order of the Ministry of Finance
Registering a name
It is mandatory to register a name before registering the business entity. After the approval of the name application, 120 days shall be given to register the business entity. After the expiry of 120 days, the name shall not be reserved and will be made available in the public domain. The cost of a name application is around $15.
Specifying the business activity and address
The primary and secondary activities of the business should be specified along with the name application by choosing the Singapore Standard Industrial Classification (SSIC) code corresponding to the business activity. The proposed owner of a sole proprietorship must specify their business address as well. In case the residential address is to be used as a business address, approval under the Home Office Scheme has to be taken before the registration. An alternate address must be specified in case the proposed owner doesn't want to give their residential address for security purposes. A fee of $40 is required to register an alternate address.
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Sole Proprietorship Registration in Singapore Compliances
Particulars of Sole Proprietorship
All letterheads, invoices, bills or other necessary papers used for the purposes of transacting business must have the registration number and the name of the sole Proprietorship listed. Any change concerning the particulars of the sole Proprietorship should be duly informed to the Registrar within 14 days from the date of such change.
Account and Audit
Sole proprietors do not need to audit their accounts. Sole proprietors must file an annual income return annually. Sole proprietors do not need to file annual financial statements with the Accounting and Corporate Regulatory Authority (ACRA) of Singapore. A sole proprietorship firm must maintain financial records and transactions for a minimum period of five years.
Renewal for sole Proprietorship registration should be done annually before the expiration of registration. There is no need to conduct an Annual General Meeting (AGM) or appoint directors or company secretaries in the case of the sole Proprietorship.
Conversion of Sole Proprietorship into a Private Limited Company
No Objection Letter
A letter has to be written on behalf of the owner of the sole Proprietorship specifying that he/she has no objections concerning the transfer of the business name of the sole Proprietorship and its usage by the private limited company.
Incorporation of Private Limited Company
Follow all the prerequisites required to form a private limited company in Singapore. Also, specify the effective transition date of the transfer or takeover of the business. You must inform ACRA about the newly formed private limited company and the cessation of the sole Proprietorship.
Transfer of assets
Transfer all the business assets of the Proprietorship within three months of incorporating the private limited company. The assets that are to be transferred include bank accounts.
Since permits and licenses are not transferrable, therefore they need to be renewed by the respective authority. The contracts signed under the name of sole Proprietorship have to be novated or resigned under the name of the newly formed private limited company.
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Particulars of Sole Proprietorship Registration in Singapore
NRIC and full name
The full name of the proposed owner must be attached to the application of registration by Part II, Section 6 of the Business Names Registration Act, 2014.
The contact details and the nationality of the proposed owner, namely telephone number and email address, must be specified.
The residential address or the proof of the address of the proposed owner must be specified. Any change in these particulars must be duly communicated to the ACRA.
Nature of the Business
The nature of the proposed business of the sole Proprietorship, the proposed registered office of the sole Proprietorship, and the proposed date of commencement of business should also be specified.
Bank Account Opening of Sole Proprietorship
After the successful completion of the registration of your company on the BizFile+ portal, you can proceed to open up a bank account in Singapore in the name of your sole Proprietorship. Opening a corporate bank account in Singapore is an easy task with the assistance of Enterslice. We have prepared a list of necessary papers required by you to open up a bank account in Singapore
- Copy of Certificate of Incorporation of the Proprietorship
- Copy of the business profile of the Proprietorship
- National ID card of Singapore or copy of passport
- Proof of residential addresses of the proposed owner
Post Sole Proprietorship Registration in Singapore
After registration, each sole Proprietorship will be given a free business profile, which shall contain the registration details.
The sole Proprietorship may obtain licenses or approvals from other government agencies. In case no license or approval is required, the sole Proprietorship may commence its business.
Unique Entity Number
After registration, the sole Proprietorship will be given a system-generated Unique Entity Number to transact with government agencies.
Challenges: Sole Proprietorship Registration in Singapore
There are some hindrances that you may get while conducting your sole Proprietorship registration in Singapore, which include choosing the right form of business structure for your company, choosing an appropriate business name, adhering to Regulatory compliances as per ACRA guidelines, Tax Regulations Compliance, Post Registration Compliances, Maintaining necessary papers/checklist, Opening up of bank account in the name of the Proprietorship and getting appropriate licenses and permits. Our Foreign Business Incorporation desk at Enterslice shall help you resolve these challenges and create a hassle-free registration experience for you.
Sole Proprietorship Registration by Foreigners
In case a foreigner wants a sole proprietorship registration in Singapore, then he/she is required to appoint at least one authorized representative who is an ordinary resident or permanent resident of Singapore. The proposed owner should also engage a registered filing agent who would submit the online application at BizFile+ on his behalf.
If foreigners want to stay in Singapore to manage the operations of a sole proprietorship, they must seek approval from the Ministry of Manpower (MOM) after registering the sole Proprietorship.
Taxation of Sole Proprietorship
A sole proprietorship in Singapore is not taxed as a business entity; however, its profits are considered a part of the personal income of the owner, and therefore, it is taxed as per Singapore's current income tax rate based on the personal income of the owner.
The current income tax rate in Singapore varies from 0% to 22%. Since all the registered sole proprietors in Singapore are considered self-employed, their income from the business comes under the "business" head and forms a part of their personal income.
Refusal of Sole Proprietorship Registration in Singapore
The Registrar may refuse to a Sole Proprietorship registration in Singapore if the proposed business is likely to be used for unlawful purposes, if the proposed business is prejudicial to public peace and welfare of Singapore if the proposed business is detrimental to the national security of Singapore, and if the person is a foreign company that is not registered under Division 2 of Part 11 of the Companies Act 1967.
Why choose Enterslice?
- Streamlining the sole proprietorship registration in Singapore will make it easier for our clients to understand.
- Qualified and experienced team of lawyers, company secretaries, and charted accountants to cater to your demands.
- Comprehensive Sole Proprietorship registration in Singapore in line with Singapore's latest regulations.
- Leveraging the power of AI and Legal Technology for hassle-free sole Proprietorship registration in Singapore.
- One-stop solution for your sole Proprietorship registration in Singapore.
- End-to-end assistance throughout the sole proprietorship registration process.