Sole Proprietorships
Sole proprietorships are the simplest form of business entity in Singapore. It is ideal for individuals who want complete control over their business, and are aiming to have small-scale operations.
Pros:
Simple and low-cost
- Setting up a sole proprietorship in Singapore is a quick and simple process that requires minimal paperwork as compared to other business entities. It is also significantly more affordable.
Control
- As a sole proprietor, you can have complete control over operations and decision-making
Less regulations
- Sole Proprietorships are bound by fewer regulations and requirements as compared to other business entities
No shareholders
- As there are no shareholders, you do not need to share your profits with others
Cons:
Liability
- As the owner as sole proprietor, you are 100% responsible for any debts and liabilities. In the case of financial difficulty, this can put your personal assets at risk.
Limited growth potential
- As sole proprietorships are limited to the efforts of an individual, it is harder to up-scale and expand your business
Taxation on personal income
- If your business earns a high level of income, you would be subjected to personal tax rates, which could potentially be higher than corporate tax rates