The Simplest Singapore Business Setup

By: zbenriquez | Posted: 16th November 2010

Having one person to own the whole asset as well as the liabilities and responsibilities of the business is the most ideal setup of a micro and small business operations.

With the flexibility and dynamism of having one person to own the company, he can address to every concern even to the most minute detail which is a wise thing to do for a business to prosper. This capacity is attributed to having full control and authority of solely owning a business.

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.

Below are the main characteristics of the sole proprietorship:

*The owner or the sole proprietor is totally responsible for the whatever claims, lawsuits, financial obligations and other drawbacks pertaining to his business.

* The business is not treated as a separate entity from its owner.

* The business is not intrinsically considered a "legal entity" so it cannot own properties, obtain supplies and make a lawsuit under its name.

*The business is not a separate legal entity from the sole proprietor.

It is inevitable to not just have advantages but also disadvantages of having a sole proprietorship as a business structure. These advantages and disadvantages must be taken into consideration by businessmen.

The Basic 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.

The earnings and other benefits would be solely enjoyed by the owner. He doesn't have to go through the hassle of distributing dividends, bonuses and other profits generated by the business.

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.
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Rikvin (www.rivkin.com) is the leading company registration firm and has successfully helped hundreds of both foreign and local entrepreneurs form a Singapore Sole Proprietor. The firm provides a complete corporate solution under one roof which includes assistance in Singapore Company Registration, with the opening of corporate accounts, business registration including accounting, tax, immigration related to work passes visa and compliance services.
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Tags: earnings, sole proprietor, profits, business structure, business owner, hassle, business operations, flexibility, businessmen, dividends, financial losses, debts, owning a business, dynamism, financial obligations, liabilities, sole proprietorship, separate legal entity, minute detail