subject: All About Singapore Sole Proprietorship [print this page] The most flexible and the simplest Singapore business setup is the sole proprietorship.
This setup is ideal to micro and small business operations. Only one person owns the entire asset of the business together with its liabilities, duties and debts.
The most notable benefit of the sole proprietorship is that the owner enjoys unlimited control and authority when it comes to handling his business. When running this kind of setup it is wise to scrutinize every detail in running the business however small they may be.
While sole proprietorship has its advantages it certainly has it disadvantages such as the business owner is personally liable for all the claims, lawsuits, debts, and financial losses of his business which is viewed as his legal extension.
The sole proprietor is completely 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 "legal entity" 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 proprietor.
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.
Its Disadvantages
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.
All About Singapore Sole Proprietorship
By: Peter Johnson
welcome to Insurances.net (https://www.insurances.net)
