This type of entity is suitable for small businesses that have negligible or no risks. It is owned by one person who is the decisive authority and owns all the assets and liabilities of the business.

1. SOLE PROPRIETORSHIP

2. SOLE PROPRIETORSHIP
This type of entity is suitable for small businesses that have negligible
or no risks. It is owned by one person who is the decisive authority
and owns all the assets and liabilities of the business.
The business is not separate from the Owner who has unlimited
liability. Therefore a Sole Proprietorship may be the simplest type but
it also the riskiest business entity.
Foreign individuals and companies can register a Sole proprietorship
but must appoint a local resident manager. Citizens, Residents,
Employment Pass holders can register a Sole Proprietorship.
Advantages Disadvantages
• Quick, easy and least expensive to set up. • The owner’s personal assets are at risk since
• Easy to administer and manage because of the liability is passed therough to the owner,
undivided authority and control. who is responsible for all debts and losses.
• Less administrative duties, on going compliance • Earnings are charged at personal income tax
requirements. rates and is deprived of incentives offered to
• All the profits generated by the business will companies.
be taxed at personal income tax level. • Lack of continuity; the business is identified
• Easy to close. with the owner therefore not perpetual and
it ceases with the death of owner and is not
transferable by part.
• Raising capital through loans from institutions
Income ($) Personal Tax Rate Corporate Tax Rate or investors is difficult due to inferior image
and dependency on sole owner.
20,000 0% 0%
• Must renew business registration annually and
50,000 (8.5%) $4,250 0% top up CPF account.
• Sole proprietors do not enjoy tax exemptions
100,000 (14%) $14,000 0%
and rebates available to corporations.
200,000 (17%) $34,000 (8.5%) $8,500
Online Resources
Sole Proprietorship Singapore | Sole Proprietorship vs Limited Liability Partnership vs Private Limited Company
Last updated on 12 July 2012 Copyright © 2012 Rikvin Pte Ltd

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