Sole Proprietorship and Partnership (LLP/LP/P) registration
Other Business Entities Setup
To run a business you have to register as an entity first with the help of professional business consultant in Singapore. But that entity doesn’t necessarily have to be a company. You can choose an entity as per your requirements and if a private or public company doesn’t fit in it then there are other options as well, like sole proprietorship, partnership, limited partnership, limited liability partnership etc. Choose an entity that best suits your needs and get it registered. Once it becomes a legal entity in the eyes of Government then you are free to commence your business registration singapore .
At AccTrust Advisory, we are here to serve you in every possible manner. Be it registration of entity or formulation of necessary documents, we are here for you. We will take care of all your secretarial needs and provide prompt and precise solutions. With us by your side you will not need worry about compliances as we’ll have them covered. You can have all your focus on the business and we’ll do all secretarial work for you.
Single? Do not want to take much risks? Have limited capital to start your business? Then sole proprietorship is the best form of entity for you. As the name suggests, in sole proprietorship there is only one owner and the business gets registered in his name. Unlike a company, sole proprietorship does not enjoy separate legal entity. It also doesn’t provide the benefit of limited liability. Nevertheless, it is the most preferred form of entity if a person has less capital to invest and doesn’t want to get involved in too many legal compliances.
Since a separate legal entity is not formed in case of sole proprietorship, individual income tax rates will be applicable which will vary from 0-20%. Secondly, the business entity will neither be able to sue nor get sued in its name. Thirdly, the owner of the business will be liable for all losses, risks and loans. Fourthly, the loan will be granted to the owner and not to entity except for cash credit limit, which gets attached to its current account.
The business structure is suitable for small entities and one must get it converted to a company if there is optimum growth. Get in touch now to know more about business registration Singapore.
Partnership is not much different from sole proprietorship except for the fact that instead of one there are multiple proprietors, all known as partners. It can be summed in one line as a sole proprietorship but with more than one proprietor. As per the rules of ACRA every partnership firm must get registered with it. It must have at least 2 partners but a maximum of 20 only. A partnership deed is drafted that contains all the rules and regulations along with profit sharing ratio, initial capital brought in by the partners, active status of partners etc.
Once a partnership is registered it can commence business. Some of the important points to consider while registering your partnership firm are:
- A partnership firm is not a separate legal entity. Hence, like sole proprietorship it can neither sue nor get sued upon.
- The liability of partners is unlimited in case of risks, losses and debts.
- Along with profits they will share the losses in the same ratio.
- The profits earned by the firm will form part of partner’s income and will be subject to tax as per Individual tax rates.
This is a hybrid concept introduced by the Singapore Authorities. Although it is not so appealing, it certainly has some nice features. A limited partnership is one in which there are two kinds of partners, viz. general partner and limited partner. A general partner is similar to a partner in partnership. On the other hand, a limited partner has limited liability up to the extent of his investment in terms of capital or property or both. But unlike a general partner, a limited partner cannot get involved with the management of limited partnership. The moment he does that he will automatically become a general partner with unlimited liability towards risks, losses and debts.
Rest all features remain similar to that of a normal partnership.
Limited liability partnership
Limited liability partnership is by far the most appealing and preferred form of partnership. It is a partnership but with salient features of a company. A limited liability partnership firm enjoys separate legal entity and its partners have limited liability up to the extent of their investment in the partnership. A partnership deed is formed which comprises of details regarding the partnership along with individual responsibilities.
A limited liability partnership is formed by professionals like accountants, doctors, architects etc. who come together to form a partnership but are responsible for their own area of expertise. They bring in their own clientele and share resources and profits. Some of the important points to consider are:
- Since a limited liability partnership is a separate legal entity it can enter into contract in its own name. It can also sue and get sued upon in its name.
- It is mandatory to appoint a local manager in case of limited liability partnership.
- A limited liability partnership does not get dissolved with death or incapacity of a partner.
At AccTrust Advisory, you will get all the services related to company registration of other business entities. To avail our services, give us a call at +65 6635 2171 or email us at firstname.lastname@example.org.