Entrepreneurship seems to be the buzz word in Singapore nowadays, with many people rushing to create new companies. If you’re getting ready to make that first step and create your own start up, you might be confused by the many different types of business structures available to you.
Here’s all you need to know about being your own boss and setting up a business:
Things You Need To Consider
- Are you alone in this venture, or do you have partners?
- Are you willing to risk unlimited liability, or do you want to limit liability?
- Are you willing to be taxed at a personal level? Or would you like the venture to carry the tax burden?
Things You Need
1. Singapore Citizens/PR
Singpass
If you’re a Singapore citizen who has forgotten your Singpass password, it can be reset most Community Centres and locations here or reset it online.
An online payment method
Details of all the partners in the new venture (I/C Number., Address, Name, Contact No.)
2. Foreigner
An Entrepass which you must apply for
An online payment method
Different Business Structures
1. Sole Proprietorship
One of the most common form of business in Singapore, a Sole Proprietorship is a business run by a single person. The business and the owner are considered the same legal entity. The owner is personally liable for all debts and losses of the business. Profits are taxed at the owner’s personal income tax rates. Sole proprietorships need to be renewed every year.
Set-up Fee: $65
2. Partnership
A business that has between 2 – 20 partners. The business and its owners are considered the same legal entity and the partners are each personally liable for the partnerships debts and losses. Profits are taxed at each partner’s person income tax rates. Partnerships need to be renewed every year.
Set-up Fee: $65
3. Company
A business that is a separate legal entity from its shareholder and directors. The business is considered a separate legal entity from its shareholders. Shareholders are not personally liable for debts and losses of the companies, though they may lose as much as they had invested. The rules on companies are set out in the Companies Act. Profits from a company are taxed at the corporate tax level. It should be noted as well that the annual filing procedures for a company are probably the most sophisticated among all the business structures mentioned.
Set-up Fee: $315
4. Limited Liability Partnership (LLP)
A structure that was not available in Singapore till just a few years back, an LLP provides the partners some rights of a partnership and some rights of a company. LLP’s do not have unlimited liability, like a company their partners are not responsible for any debts or losses that the business incurs on a personal level, unless the partner is personally responsible.
LLP profits are also taxed on a personal level instead of the corporate level, thus combing the best elements of a partnership and a company.
Set-up Fee: $165
5. Limited Partnership
Limited Partnerships is the newest business structure available in Singapore. With a minimum of two partners, a minimum of one as a general partner and a minimum of 1 as a limited partner. General partners are liable for all debts and obligations while limited partners have their obligation limited to the amount they contribute to the business. In most other aspects though, this is similar to a partnership.
Set-up Fee: $65
How To Set Up Your Company
Go to ACRA website and click under the appropriate tabs and follow the instructions.
Read more at The New Savvy if you want to know more. The New Savvy is a financial platform that aims to empower women through meaningful content that are relevant and practical. The New Savvy provides resources to demystify finance and spur financial consciousness. We want to make money interesting to women and transform women’s relationship with money.
Republished with permission. All rights reserved.
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