In 2010, World Bank has declared Singapore as the easiest place for people to run a business in. Now in 2019, there are much more advancements and ease for everyone to set up their company in Singapore. For local residents who are interested in starting up a company, first, they must understand the types of business that they can establish in the country. In general, there are three business types, namely Sole Proprietorship and Partnership. This article will go over each type and help local entrepreneurs to decide on what kind of business they can open in Singapore before advancing to the process of company registration in Singapore.
1. Sole Proprietorship
This type of business entity is one of the simplest. However, it comes with a number of risks. If you own a sole proprietorship type of business, you and your company will be considered the same entity. Therefore, all assets and liabilities of the business are personally owned by the owner. This means there is no personal assets protection from business risks and liabilities. In this case, your personal asset may be taken should your business is unable to pay for its liabilities as the owner is personally responsible for everything. For inexperienced entrepreneurs, this type of business is not recommended.
2. Partnership
In Partnership type of business, two or more people are expected to own a business together. There are three types of Partnerships:
General Partnership
The minimum owner of a general partnership business is two with a maximum owner of 20. These partners will pay their taxes as personal income tax corresponding to the shared income from the partnership. A general partnership still has its risks similar to sole proprietorship where all owners/partners are personally responsible for all liabilities and debts of the company, and each partner may be responsible for the actions of other owners.
Limited Partnership
In a limited partnership, there is a limited partner in addition to a general partner. However, these additional limited partner’s liabilities are limited to their investment in the partnership. Because of their limitations, they are also prohibited from participating in managing the business.
Limited Liability Partnership
A limited liability partnership is a type that combines the features of partnerships and companies. The owners of a limited liability partnership are facilitated with the flexibility of a partner in the business while at the same time allowed to enjoy various benefits similar to a corporate body like a private limited company. A limited liability requires at least two partners in business. This type of entity is more suitable for businesses that involve two or more professionals that are willing to create a joint practice in a common field such as a law firm and is not suitable for trading business or activities. Sharing of profits and responsibilities in this business type are discussed and agreed between the owners. You can visit A1 website and find out more in details by visiting here, https://www.a1corp.com.sg/
