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Understanding
Sole-Proprietorship in Singapore
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Understanding
If you’re considering starting a business in Singapore, it’s essential to explore your options. One of the business structures available is a Sole-Proprietorship. In this post, we’ll provide you with a comprehensive overview of Sole-Proprietorship, including its legal status, registration requirements, taxes, and more.
Legal Status:
A Sole-Proprietorship is a business owned and operated by one person. Here’s what you need to know about its legal status:
- It is not considered a separate legal entity.
- The owner has unlimited liability, meaning they are personally responsible for all business debts and losses.
- The owner can sue or be sued in their own name or in the business’s name.
- Property can be owned in the individual’s name.
Yearly Statutory Obligations:
Operating a Sole-Proprietorship in Singapore comes with certain yearly obligations:
- Yearly renewals are required, with options for one-year or three-year renewals.
- Self-employed individuals must top up their Medisave account with the CPF Board before renewing their Sole-Proprietorship registration.
Registration Requirements:
To set up a Sole-Proprietorship, you need to meet specific requirements:
- You must be at least 18 years old.
- You must be a Singapore citizen, Singapore permanent resident, or an EntrePass holder.
- If you’re not a resident in Singapore, you must appoint an authorized representative who is ordinarily resident in Singapore.
- Undischarged bankrupts cannot manage the business without approval from the Court or the Official Assignee.
Taxes:
Taxation for a Sole-Proprietorship in Singapore is based on the owner’s personal income tax rates. This means that the profits of the business are taxed as part of the owner’s personal income.
Continuity in Law:
A Sole-Proprietorship continues to exist as long as the owner is alive and wishes to continue the business. It offers flexibility and ease of operation.
Closing the Business
Closing a Sole-Proprietorship can be done in two ways:
- By the owner through a formal cessation of business.
- The Registrar can cancel the registration if it is not renewed or if the Registrar determines that the business is defunct.
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