Singapore citizens or permanent residents may register. Foreign individuals and companies must appoint a Singapore resident manager in order to register this type of business structure.
In the initial stages of starting up, this vehicle may prove fuss-free and suitable. However, there are disadvantages to setting up a sole proprietorship. For one, the owner is fully liable for his business activities and bears all risks, debts and losses. In the case of a loss or debt, the owner may be required by law to sell off personal assets.
In addition, as the business scales up, two major issues arise. Sole proprietorships face limited choices to secure funding from banks and must be prepare to put up personal assets as collateral. In addition, a sole proprietorship owner cannot sell a stake of the business to investors in order to raise funds, precisely because it can only be owned by one person or company.
The advantages and disadvantages of registering a sole proprietorship are outlined in our Singapore Sole Proprietorship page of Rikvin.com.
