The Ultimate Guide to Registering a Sole Proprietorship with ACRA in Singapore
In this article, we will delve into the process of registering a sole proprietorship with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore. A sole proprietorship is the most common business structure in Singapore, and it is the simplest and most cost-effective way to start a business. However, registering a sole proprietorship with ACRA requires careful attention to detail and compliance with certain regulations.
**Who is Eligible to Register a Sole Proprietorship?**
To register a sole proprietorship, the individual must be a citizen or permanent resident of Singapore, or a foreigner who has been approved for an Employment Pass or a EntrePass. The sole proprietor must also have a valid Singapore address.
**What are the Documents Required for Registration?**
The following documents are required to register a sole proprietorship with ACRA:
1. **Business Name Application**: The sole proprietor must submit a business name application to ACRA, specifying the name of the business, the business activities, and the business address. The business name must end with the words “and/or” followed by the name of the sole proprietor.
2. **Evidence of Business Address**: A sole proprietor must provide proof of a valid business address in Singapore. This can be a utility bill or a lease agreement.
3. **Identification Documents**: The sole proprietor must submit identification documents, such as a Singapore ID, FIN, or a copy of their passport.
4. **Business Registration Certificate**: The sole proprietor must also submit a business registration certificate, which can be obtained from ACRA.
**How to Register a Sole Proprietorship**
To register a sole proprietorship, the individual can follow these steps:
1. **Submit a Business Name Application**: Submit the business name application to ACRA, along with the required documents.
2. **Pay the Registration Fees**: Pay the registration fees, which are SGD 70 for a standard processing time of 2 weeks, or SGD 110 for a fast-track processing time of 1 business day.
3. **Wait for the Registration Approval**: Wait for ACRA to review and approve the business name application. ACRA will send a business registration certificate to the sole proprietor once the application has been approved.
4. **Register for Goods and Services Tax (GST)**: If the sole proprietor’s business has a GST turnover of SGD 1 million or more in the past 12 months, they must register for GST.
**Post-Registration Requirements**
After registering a sole proprietorship, there are several post-registration requirements that the sole proprietor must comply with:
1. **Maintain Accurate Records**: The sole proprietor must maintain accurate records of the business, including financial statements and tax returns.
2. **File Tax Returns**: The sole proprietor must file tax returns annually, or quarterly if their business has a GST turnover of SGD 1 million or more.
3. **Comply with Singapore Laws**: The sole proprietor must comply with Singapore laws and regulations, including health and safety regulations and environmental regulations.
**Conclusion**
Registering a sole proprietorship with ACRA is a straightforward process, but it requires careful attention to detail and compliance with certain regulations. By understanding the requirements and procedures, business owners can ensure a smooth and successful registration process.
**FAQs**
1. **What is the difference between a sole proprietorship and a limited liability partnership (LLP)?**
A sole proprietorship is a business structure that is owned and managed by one individual, whereas a limited liability partnership is a business structure that is owned and managed by multiple partners, with limited liability protection.
2. **How long does it take to register a sole proprietorship with ACRA?**
The standard processing time for registering a sole proprietorship with ACRA is 2 weeks, but businesses can opt for a fast-track processing time of 1 business day for a fee.
3. **What are the taxes imposed on a sole proprietorship?**
A sole proprietorship is taxed on the individual’s personal tax returns, and the business’s profits are considered to be the individual’s income. The individual is taxed on the business’s profits, and they are also subject to other taxes such as goods and services tax.
4. **Do sole proprietors need to have a separate business bank account?**
Yes, it is recommended that sole proprietors have a separate business bank account to separate personal and business finances.
