Singapore Company Registrar services and has successfully helped foreign and local
entrepreneurs wishing to form a Singapore company. The Singapore sole
proprietorship is the most flexible and simplest business setup. This setup is ideal to
micro and small business operations, there is only one person who owns the entire
business, including its assets, financial liabilities, debts, and duties.
The most notable benefit of the sole proprietorship is that the owner enjoys
unlimited control and authority when it comes to handling his business. With this,
making hasty decisions is possible since there is no need for the approval of other
However, the advantage of having a full control comes with a steep price as the sole
proprietor is personally liable for all the claims, lawsuits, debts, and financial losses of
his business which is viewed as his legal extension.
These are the main characteristics of the sole proprietorship:
- The sole proprietor has no limited liability, as a result, he is directly liable for the
lawsuits, claims, debts, and financial losses related to his business. - The business is
not treated as a separate entity from its owner. - The business is not treated as a 鈥渓
egal entity 鈥?per se since it cannot purchase supplies, own properties, and file a
lawsuit under its name. - The business is not a separate legal entity from the sole
Just like any business structures, the sole proprietorship has its pros and cons which
must be greatly considered by entrepreneurs:
Its Primary Advantages
Because there is only one owner, it is very easy for him to sell and transfer his
business anytime he wants to because there is no need to seek the approval of other
co-owners. With this, the business is usually easy to liquidate compared to other setup
such as partnership and corporation.
Also, being the sole proprietor means that a person can enjoy all the profits and
earnings of his business without having to divide these to other people.
Another advantage of this setup is that the sole proprietor is not obligated to perform
complicated compliance matters and procedures. In fact, he is not even required to
submit his annual returns since he is only taxed at a personal income rate.
Being the only owner also comes with several disadvantages and one of these is the
unlimited liability of the sole proprietor, which means that his personal assets can be
used to pay off for the business-related debts and losses. It would also be more
challenging to raise capital and operate the business because there is only one owner.
ABOUT THE AUTHOR:
AsiaBiz provides Singapore Company Registrar services and has successfully helped
foreign and local entrepreneurs wishing to form a Singapore company.