There are several pros and cons to every business entity. Let us discuss them.
- The sole proprietorship is the easiest business entity to form.
- You would not have to file any audited accounts or file annual returns with the Accounting and Corporate Regulatory Authority (ACRA).
- It is most suitable for a small business owner as it only involves a single owner.
- Profits are treated as income, so they are taxed at the personal income tax rate.
- You can quickly close or wind up your business.
- Foreigners can also apply for sole- proprietorship in Singapore; however, they have to appoint a representative who is a Singaporean resident.
- The Sole owner is entirely liable for his business and needs to bear all the debts and losses solely.
- He may face limited choices in getting funds from banks.
- He is also restricted from selling stocks of his business to investors to raise funds.