Any person who pursues an activity on a continual basis and for the purpose of gain must register a business in Singapore.
Many entrepreneurs begin their journey by registering their business as a sole proprietorship.
A sole proprietor is where the business owner has absolute control over his business and that he will also stand personally liable and accountable for all legal matters arising from the conduct of his business.
A common misconception is that a sole proprietorship registers a person only. A company can also be registered a sole proprietorship; as long as there is only one company. Partnership structure is also not eligible to register a sole proprietorship.
A sole proprietorship is a good place to start, but when entrepreneurs outgrow being a sole proprietorship, they consider setting up as a private limited company.
How can you tell that you’ve outgrown a sole proprietorship?
When the market demands that you expand your business to bring your services or products to more customers, you may need to take out a loan. When you take out a loan as a sole proprietor, this means the bank could come after your personal assets should you fail to meet your payment obligations.
Investors are interested in your business
This could be a sign of growth up ahead. Your business can only grow up to a certain extent if there is only one owner. With more money in the pot and more heads in the board room, your business can have the potential to reach new heights.
Retirement Is In The Horizon
Sole proprietors can’t gift part of their business to another person when they want to retire. Before your wealth becomes a liability, or before running your business becomes a problem when you are seeking retirement, consider reorganizing your business.
Why private limited company and how can professional Secretarial Services Company in Singapore help you set it up?
A private limited company is a popular choice of business entity among entrepreneurs primarily because of the flexibility it offers. It is limited by shares with a legal entity of its own. This means the business owners and directors of a private limited company will not stand personally liable before the law. A private limited company is also a taxable entity, which affords protection for shareholders who do not become liable for the company’s debts, obligations, or losses if the amount is beyond the shareholders’ share capital.
Engaging a professional company secretarial service in Singapore can help entrepreneurs register their business as a private limited company by preparing the necessary requirements and documents for registration.
How can Company Secretarial Services firms in Singapore help entrepreneurs in transition from sole proprietorship to private limited company?
A Corporate Services Company In Singapore Can Help Entrepreneurs Transition Through The Following Steps:
Preparing The Necessary Documents And Requirements
One of these documents is called the No Objection Letter. As the owner of the business, you can engage a corporate services firm to write the No Objection Letter, which simply states that you do not have any objection to use the same business name you used as sole proprietorship in the private limited company.
Registering A Private Limited Company
The secretary services firm will also prepare the necessary requirements to register the sole proprietorship into a private limited company. For a complete list of the requirements, contact Corporate Services Singapore.
Transferring accounts from the sole proprietorship to the newly formed private limited company is important to make sure there are assets that will support the new company. It is also important to clear outstanding obligations of the sole proprietorship to give the new private limited company a clean book of accounts to start with. Accounts that can be transferred may include bank accounts and contracts. For contracts, these have to be signed again under the new private limited company.
Closing The Sole Proprietorship
Finally, the company secretary will also help file the closure of the sole proprietorship with the ACRA.
The Advantage Of Engaging Professional Company Secretarial Services In Singapore
Paper works and administrative matters are important in making sure your business runs smoothly, and that your company does not come at odds with the authorities. Consider engaging a professional company secretarial service in Singapore as your silent support workers in the background. As you focus on growing your business, increasing your sales, penetrating new markets, and hiring people to help you achieve your business goals, you will need the help of firms offering company secretarial services in Singapore to help you ensure your standing with the government is good and that no legal matters will stand in the way of growing your business.