SP is a business owned by one person or one Singapore-registered company. It is the simplest form of business structure in Singapore and has absolute ownership and authority in the management of the business.

 

Legal Status of a SP

• SP is not a separate legal entity

• The owner has unlimited liability

• SP can sue or be sued in individual’s own name

• SP can also be sued in business name

• SP can own property in individual’s name

• Owner personally liable for debts and losses of business

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Yearly Statutory Obligations

• Yearly renewals (one year or three years)

• CPF Medisave Top-Up required for Self-employed Persons before they can renew sole proprietorship

 

Registration requirements for SP

• The person can be a Singapore Citizen/Permanent Resident or a EntrePass holder and must be at least 18 years old

• If owner is not resident in Singapore, he must appoint an authorized representative who is residing in Singapore

• Self-employed persons must top up their Medisave account with the CPF Board before they register a new business name, become a registrant of an existing business name, or renew their business name registration

• Undischarged bankrupts cannot manage the business without approval from the Court or the Official Assignee

 

Taxation of a SP

Although the SP is a tax resident, it is not considered as a company entity; therefore its profit is taxed at the owner’s personal income tax rates. Singapore’s personal income tax rates for resident taxpayers are progressive from 0% to a maximum of 22% for income in excess of S$ 320,000.

 

Continuity of business

SP exists as long as the owner is alive and desires to continue the business.

 

Closing the Business

• Any changes must be submitted either by owner or authorized representative by filing a Notice of Cessation of Business Registration

• The Registrar can cancel the registration if it has expired and has not been renewed or Registrar is satisfied that the business is defunct

 

Our Opinion

We do not recommend SP to entrepreneurs as there are serious drawbacks on financial risk. The owner have unlimited liability and the creditors whom the business owes money can come after the personal assets.