Singapore business

Posts : 2 Reputation : 0 Join date : 2009-10-28

I am planning to start my own business in Singapore. However, I am confused about whether to operate as a sole proprietorship or a company? Any suggestions?

Posts : 6 Reputation : 1 Join date : 2009-08-13

Setting up a private limited Singapore company is the best choice for entrepreneurs. Your personal assets are protected from business liabilities, you enjoy special tax incentives from the government, and you have a structure that allows you to grow big.

Here are the disadvantages of a SP.

1. Sole Proprietorship has no separate legal identity and you are personally responsible for all debts and legal actions against the business.

2. Since a sole proprietorship does not have a separate legal entity, the owner has unlimited liability. In other words, creditors may sue you for debts incurred and can also obtain a court order to claim against your personal assets, including your property. There is no protection offered for your personal assets.

3. As a sole proprietor, you and your business are inseparable. Your business has no perpetuity and comes to a standstill with your retirement or demise.

4. As a sole proprietor, it's quite difficult to raise external capital through loans or investment in your business. Capital is limited to your personal finances and the profits generated by the business. To secure loans from banks and lending institutions, you must be prepared to put up your personal assets as collateral.

5. A sole proprietorship cannot be sold as whole. Instead, you will have to individually transfer each of the assets, licenses and permits.

6. Sole proprietorship entity is the least preferred type of setup for serious business from a public perception point of view.

Whereas Setting up a pte ltd co helps you overcome all of the above disadvantages. Refer to Singapore Incorporation: Types of Business Entities Guide for a comparison of both structures.

Subject: Re: Singapore business Fri Nov 13, 2009 10:15 pm

Sole proprietor has its advantages. Your cost of maintaining sole proprietor business is much lower (need not pay for secretarial fees, FRS or even audit fees). If you just want to try a small business that has low risk and implication to your personal life, sole proprietor may be the best choice. Business services like dress making or accounting services for small business could take such form as risk is lower.

Subject: Re: Singapore business Sat Nov 14, 2009 4:00 pm

How about sharing what kind of business you are starting so we can try to give some ideas or suggestions? Food & beverage? I.T ?

Subject: Re: Singapore business Fri Dec 18, 2009 12:39 am

Although setting up a PTE LTD has it's advantages. It is also more expensive and needs more reporting of accounts than Sole Proprietor (SP) or Partnerships.

Thus, you have to look at the size of your business. If it is just a small business. Let's say you have a small website like this one, and you have an upset customer. It seems very unlikely that he will sue you for such small products/services. Law suits cost a lot of money, and it is unwise to sue over small matters.

So if your business is small enough and it's products don't put people's lives at risk (e.g. a bungee cord business), then your risk of getting sued is low. Thus, there may be little point in paying so much for legal protection when there is little risk.