Are you having restrictions on the limited budget for starting a business? Are you wondering what type of business entity that’s most appropriate for you to open in Singapore, one of the most business-friendly countries in the world? Fret not, opening a Sole Proprietorship in Singapore may be your answer and this is the article that serves the overview of the said type of business.
A Sole Proprietorship is one of the business entities you can open in Singapore as an individual. It is a business that is held by one person or a company without having to team up with a partner. Opening a Sole Proprietorship in Singapore means that after the company registration in Singapore is successful, you will have full ownership of your company as well as a full authority regarding the whole business operations.
The Singapore Business Registration Act Cap. 32 approves a Sole Proprietorship to engage in any type of trade, commerce, craftsmanship, profession, and any possible legal activities in the purpose of gaining profits.
A Sole Proprietorship company in Singapore is viewed as one entity as the business owner. That means the owner is liable for all losses and debts of the business. A Sole Proprietorship company cannot sue or be sued in its own name, it also is not allowed to own properties with its own name.
The Advantages of a Sole Proprietorship
A Sole Proprietorship is a type of business that is suitable for entrepreneurs because it is economical, fast, and simple. Because it is owned individually, it is rather easy to manage because the company only have a sole decision maker. A Sole Proprietorship only requires light compliance requirements and if necessary, it is easy to close down compared to other types of business entities in Singapore.
The Advantages of Sole Proprietorship
A Sole Proprietorship type of business also has its disadvantages that you can’t overlook. You must understand that a Sole Proprietorship uses the owner’s personal assets to run the business. This causes a larger risk for you as the owner because you are responsible for debts and losses and if it happens, you will struggle. Another disadvantage is that it can be difficult to raise capital for this type of business because you don’t have shareholders that cash in for your business. You must rely on your personal reputation as an owner of the business to convince banks or investors in order for them to help your business financially.
Sole Proprietorship Registration
In order to get your company registered, you must first prepare several documents to submit and fulfill a number of requirements. You have to come up with a company name and have it registered. Then, you must register a local business address with proper permissions. This business address must be physical and cannot be a post office box. Then, you must provide your Singapore ID and personal address as the owner of the company. Lastly, you are to provide a declaration of compliance and Statement of Non-Disqualification. All the registration process can be done online and usually, it does not take a long time for your company to get approved for business.