A sole proprietorship is a business that you can start on your own. It can be legally owned by a person, solely without the presence of any partners. One of the greatest advantages of this type of business entity is that it is less of a hassle because you have full ownership of your business and you have all the power and position to make decisions for your company.
A sole proprietorship is allowed to engage in any kind of trade, commerce, craftsmanship, calling, profession, and any activity that has the purpose of monetary gain, as stated in the Business Registration Act, Cap. 32 of Singapore.
Now, let’s delve more into this business type before you go through the steps of company incorporation in Singapore.
- Characteristics of Sole Proprietorship
A sole proprietorship in Singapore is regarded as one entity with the owner. This is stated by the law. It means that this type of business makes the owner have full responsibility for all losses and debts that occurs to the business. Another thing that needs to be known is that a sole proprietorship can not sue or be sued in its own name, and it is not allowed to have a property under its own name.
- The Advantages of Sole Proprietorship
A sole proprietorship is economical, simple, and fast in general. It is easier to manage compared to other types of the business entity since there is only one decision-maker in the business. Another advantage of this business is that it is easier to close down since it also requires only light compliance requirements.
- The Disadvantages of Sole Proprietorship
A sole proprietorship has a few limitations and disadvantages as well, as many things do. One of the most important things to remember is that if you are starting a sole proprietorship, it means that you are putting your own personal assets into running the business. If your business is not doing well, you will take a direct hit from debts and losses. Since you are acting as the only person who funds the business, it can get quite difficult to raise capital to grow your business since you don’t have any shareholders. If you try to ask for loans, you have to be very convincing and the good reputation of your name will become important so that you can fulfill the financial needs of your business.
- The Required Documents for Registration
If you are so sure about running a sole proprietorship, then you should go through the process of company registration. To register a company in Singapore, there are documents to be submitted. But before that, you have to decide on a company name and local director as well as secretary and a registered address within the country.
Now, regarding the documents, you have to be able to provide the activity details of your business. You also have to be able to show your Singapore ID and personal address. Last but not least, a declaration of compliance and Statement of Non-Disqualification must also be provided. You might be requested for more documents if necessary.
If you can comply with all of the requirements well, the registration process of your business won’t take long.