A Closer Look At Sole Proprietorship As A Business
Singapore’s diverse commercial landscape allows for various types of businesses. One of the most common of these is the sole proprietorship, a type of business owned by a single person.
All businesses in Singapore differ according to such considerations as their legal status, their taxes and other dues, as well as their continuity in law. A sole proprietorship is not considered a separate legal entity.
The owner has an unlimited liability of all matters concerning the sole proprietorship. In the event of a legal suit, the owner could be sued under his or her name, or else in the name of the business. Likewise, the business owner could also sue in his or her name.
When it comes to the ownership of properties, the owner can use his or her name in acquiring such (and thus, having these business properties registered under his or her name). Likewise, the owner can also be held personally liable for any of the business’ losses and debts. This is decidedly different from that of the company, wherein members cannot be held personally liable for any losses or debts acquired by the company.
In order to set up a sole proprietorship, a potential owner needs to be at least 18 years old, either a Singapore citizen, Permanent Resident (PR), or bearer of Employment Pass or Dependent Pass. Should the business owner not reside in Singapore, he or she needs to appoint a manager based locally (i.e., the manager should reside in Singapore. He or she must therefore meet the abovementioned requirements).
Self-employed individuals are also free to open a sole-proprietorship. However, they must top up their Medisave account with the CPF board prior to applying for business registration.
A sole proprietorship is relatively quick to set up. The registration fees are minimal too (S$15 application fee and S$50 registration fee), and registration need only be renewed on a yearly basis. When it comes to taxes, a sole proprietorship’s income is taxed at its owner’s personal income tax rates.
A sole proprietorship will continue to be recognised as a registered entity as long as the owner continues business and renews necessary registration at the desired time. Otherwise, particularly if necessary registration or renewal requirements are not followed, a sole proprietorship is considered defunct.