1. One of the main business structures usually set up in Singapore is sole proprietorships. It is a business owned by one person, is simple to set up and less costly to administer as compared to a company. Sole proprietorships is very popular especially with small business owners due to the reasons mentioned above.
2. A sole proprietorship is a business that can be owned and controlled by an individual, a company or a limited liability partnership. As the sole owner of the business, there are no other partners in the business.
3. As for the legal status of a sole proprietorship, it can be summarised as follows:
- It is not a separate legal entity from the business owner, which means the owner and the business is the same person under the law
- As a result, the business owner has unlimited liability, i.e. the business owner is personally liable for all the debts and losses of the sole proprietorship
- In addition, the sole proprietorship can sue or be sued in the business owner’s name
4. A sole proprietorship need to be registered with ACRA. The registration fee charged by ACRA is $115 ($15 name application
fee and $100 registration fee for 1-year registration). The registration of sole proprietorships need to be renewed annually with ACRA at $30 per year. You can register a sole proprietorship if you are at least 18 years old and a Singapore Citizen, Singapore Permanent Resident, or an eligible FIN holder. FIN holders are advised to check with the relevant pass-issuing authority (e.g. MOM/ICA) regarding their eligibility before registering or taking on an appointment (e.g. as an authorised representative).
5. Foreigners who are residing overseas can also apply to register a sole proprietorship in Singapore. However, they are required to appoint at least one locally resident authorised representative, who can be a Singapore citizen, Permanent Resident, or holder of an EntrePass or Employment Pass. The foreign owner are not able to register the sole proprietorship themselves and must engage a registered filing agent, such as a law firm, accounting firm, or corporate secretarial firm, to submit the application on their behalf.
5. When it comes to closing the sole proprietorship, the sole-proprietor may notify ACRA it has ceased business by filing the cessation of business. ACRA can also cancel its registration if it is not renewed by the business owner or where ACRA is satisfied that the business is dormant or defunct.
6. As for tax filing, a sole proprietor must also report the income earned from their business operations as business income. The business income is taxed at individual income tax rates. At the end of the accounting year, the sole proprietor must prepare a statement of accounts comprising Profit and Loss Account and Balance Sheet for the business. IRAS also requires a 2-line or 4-line statement to be submitted together with the tax return.
7. PL Biz Consulting Pte Ltd is an ACRA Registered Filing Agent and Registered Qualified Individual since 2016. Please come and talk to us if you need help with your registration and filing tax return of sole proprietorship . We at PL Biz Consulting Pte Ltd have been helping many entrepreneurs and business owners to register and file their tax return since 2007.
