Singapore, as a commercial hub of Asia, has a very rich enterprise ecosystem. From very large multinational corporations to very small sole proprietorships all forms and sizes of business thrive in its pro-business environment. All profit making activities that are carried out on a continuous basis must be registered.
To setup or start a sole-proprietorship in Singapore, you need to register first. The Accounting and Corporate Regulatory Authority (ACRA) is the registering and regulatory authority for Sole Proprietorship.
Singapore Sole Proprietorship Registration Guide
The registration of Sole Proprietorship comes under the purview of Business Names Registration Act (BNRA). The Act came into effect on 3 January 2016 and repealed the Business Registration Act. It requires individuals and corporations to register each business name under which they carried on business in Singapore.
It must be noted that individuals or firms that carry on business in their own name are exempted from registration. For instance if Mr. Kevin, an independent tutor, issues invoice to his students in his name, for his services then Mr. Kevin is exempted from registering his business with ACRA. However, if he issues invoice under a business name, say, ‘Excel Tuitions’, then he is required to register his business name with ACRA.
A sole proprietorship is a business owned by a single individual or another registered entity. It is the easiest form of business to set up. Most first time and small entrepreneurs chose this entity type, because of the simplicity of setting up and negligible compliance norms. The cost is also minimal.
Overview of a Sole Proprietorship
Lacks Legal Identity: The registration does not render it a separate legal identity. It is deemed to be one and the same as the owner. Since it lacks legal identity, it cannot sue or be sued in its own name and also cannot own property.
Validity/ Renewal: Registration must be renewed. Renewal must be done before the registration expires and can renewed for a period of one year or for a period of three years.
Eligibility: Any natural person whose age is 18 years and above can register a Sole proprietorship. A Singapore registered company is also eligible to register a sole proprietorship.
Singapore citizens and Permanent Residents who are self employed, are required to register for CPF and top up their Medisave account in order to register or renew their business registration.
Officer: In the case of foreigners who are not residing in Singapore a manager must be appointed to ensure compliance with regulatory requirements and in order to accept notices served and respond to them. The manager must be at least 21 years of age and must be ordinarily resident in Singapore. Ordinarily resident means, a citizen or permanent resident of Singapore or foreigners on employment pass or dependent pass.
Registered Address: A local Singapore physical address must be registered. Resident individuals in Singapore can use their residential address as registered office address after getting approval from the relevant authority (HDB in the case of public flats and URA in the case of private residences).
Taxation: Chargeable profits are treated as personal incomes of the owner and are subjected to personal income tax rates in the case of individual owners and corporate tax rates in the case of companies.
Limitation: As it does not constitute a legal entity, a sole proprietorship cannot register another legal entity such as a partnership.
Continuity: A sole proprietorship will cease to exist with the death or disqualification of the owner.
Read more about registering a sole-proprietorship in Singapore at Singapore Company Incorporation.
