A sole proprietorship can be own by one person and one company only.
Non legal entity
A sole proprietorship is not a legal entity hence cannot sue or be sued in its own name and it cannot own or hold any property.
Personal income tax rates
Profits are taxed at personal tax rates
Advantages and Disadvantages
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 cannot enjoy the three years S$100,000 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.
- Quick and easy set up
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 tradmarks.
- 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 above 18 years old or any company can be the ownership of a sole-proprietorship. 100% local or foreign owneship is allowed. However, certain individuals are not allowed to register a sole-proprietorship.
Sole-proprietors must appoint a local manager if he/she is not a "local resident" in Singapore.
Proposed business name
Brief description of business activities
Business owner's Particulars
Foreigners: Copy of passport, overseas residential address proof.
Singapore local residents: Copy of Singapore NRIC.
Corporate entity: Copy of registration documents, Memorandum & Articles of Association.