If you’re looking to kickstart your business journey in Singapore, a sole proprietorship or partnership is often the simplest way to begin. Here’s a comprehensive guide to help you understand the differences, requirements, and steps involved in setting up these business structures.
What is a Sole Proprietorship?
A sole proprietorship is a business owned by one person, a company, or a limited liability partnership. It does not have partners.
Legal Characteristics:
- Not a separate legal entity from the owner
- Owner has unlimited personal liability for all debts and obligations
- Legal actions (sue or be sued) are taken in the owner’s name
What is a Partnership?
A partnership involves two or more partners (maximum 20 for general partnerships). Each partner can be an individual, a company, or a limited liability partnership.
Exception: Professional partnerships (e.g. lawyers, engineers, architects) can exceed 20 partners if governed under relevant legislation.
Legal Characteristics:
- Not a separate legal entity
- Partners are jointly and personally liable for debts and obligations
- Legal actions can be taken in the names of the partners
Who Can Set Up a Sole Proprietorship or Partnership?
To register, you must:
- Be at least 18 years old
- Be a Singapore Citizen, PR, or eligible FIN holder
- Ensure your MediSave contributions are up to date if self-employed
Note for FIN Holders: Check with the relevant authority (e.g. MOM/ICA) regarding your eligibility before registering or taking on roles.
Can Foreigners Register a Sole Proprietorship or Partnership?
Yes, but specific conditions apply:
- Must appoint at least one local authorised representative
- Must engage a registered Corporate Service Provider (e.g. law firm, accounting firm) to submit the application on Bizfile+
- Those wishing to run the business in Singapore must also seek MOM approval
Who Can Be an Authorised Representative?
If all owners or partners reside overseas, you must appoint a locally resident authorised representative who is:
- A natural person, at least 18 years old
- Of full legal capacity
- Residing in Singapore
Steps to Appoint an Authorised Representative:
- Go to Bizfile
- Navigate to Manage > Sole Proprietorship/Partnership
- Select “Appoint / Withdraw Position Holder“
- Endorsement by the appointed representative is required
Summary Table: Sole Proprietorship vs Partnership
Feature | Sole Proprietorship | Partnership |
Ownership | One owner (individual/company/LLP) | 2 to 20 partners (unless professional firm) |
Legal Entity Status | Not separate from owner | Not separate from partners |
Liability | Unlimited, personal | Unlimited, joint & several |
Registration Requirements | Local resident owner or authorised rep needed | Local partner or authorised rep required |
Can Be Foreign-Owned? | Yes, with local authorised representative | Yes, with local authorised representative |
Submission Method | Bizfile+ via SingPass or via service provider | Bizfile+ via SingPass or via service provider |
Need Help Getting Started?
We offer end-to-end business registration support, including sole proprietorship and partnership setup, appointment of authorised representatives, CPF MediSave advice, and Bizfile+ submissions. Contact us today to launch your business the right way!