A sole proprietorship is one type of business recognized in Singapore. It is considered as the simplest and most flexible business structure. A sole proprietorship is a business created, owned and controlled by only one person called the “sole proprietor.” The sole proprietor exercises all authority and control in managing the entire operations of the company. All Singapore citizens, Permanent Residents, and all holders of an Employment Pass, EntrePass and Dependent Pass can register as a Sole Proprietor. Foreign individuals and companies can also register as a sole proprietor as long as he appoints a local resident manager.
The basic features of a Singapore Sole Proprietorship are as follows:
LEGAL PERSONALITY. A sole proprietorship is an entity not separate from the legal personality of its owner. Thus, the sole proprietor has full liability for the losses and debts incurred by the company. In the same vein, all the profits earned by the sole proprietorship belongs to him alone. He also has the rights to sell or transfer his business as he deems fit.
TAXATION. A sole proprietorship is not eligible for tax incentives and exemptions given to private limited companies. Its profits are considered as income of the owner and thus subject to personal income tax.
ANNUAL RETURNS. Since the income of a sole proprietorship is taxed as a personal income, no annual corporate returns is required to be filed.
DURATION. The life of a sole proprietorship is not perpetual nor can it continue to exist only partly. Its existence continues until terminated either by the will of the owner or by his death.
REGISTRATION.
A sole proprietorship is required to renew its registration every year.
FOREIGN INDIVIDUALS/COMPANIES. A foreign individual or company may register as sole proprietor provided a local manager is appointed. The qualifications of a local manager are as follows: he must be a natural person at least 21 years of age; either a Singapore Citizen, or a Permanent Resident.
In applying for registration as a sole proprietor, the following documents/information must be provided in the application:
* Description of principal activities
* Proposed business name
* Local business address for the proposed business
* Copy of Singapore ID for the owner
* Local residential address of Sole Proprietor
* Declaration of compliance and Statement of Non-Disqualification
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