Convert from Sole Proprietor to Pte Ltd
What to take note if you intend to covert your sole proprietor to Pte Ltd company ?
Are you plan to re-use your sole proprietor name ? From ABC to ABC Pte Ltd ?
YES, please appeal with ACRA.( normally it will be approved with the declaration date when the sole proprietor will be terminate )
- When to close sole proprietor ‘s bank account
- When work permit to be terminate or transfer to Pte Ltd
- When to sign new tenancy agreement/ business contract
- When to amend employment contract
- What to do if sole proprietor owned some of the company asset ie computer, car ? You may disposal it or transfer to Pte Ltd’s account with reasonable market value
- Sole proprietor is under personal tax level .
IRAS ” Singapore’s personal income tax rates for resident taxpayers are progressive. This means higher income earners pay a proportionately higher tax, with the current highest personal income tax rate at 22%.”
- Pte Ltd been tax on the company profit level
IRAS “With effect from Year of Assessment 2010, a company is taxed at a flat rate of 17% on its chargeable income regardless of whether it is a local or foreign company”
(After conversion, you will need to file 2 type of tax : Company tax and Personal Tax)
COMPLIANCE LEVEL /FILING REQUIREMENT
- Being sole proprietor you only need to declare your personal tax
- Whereas as Pte Ltd is required to file :
- Annual Return with ACRA and
- Company Tax , ECI and GST ( if applicable) with IRAS
** Please click here for the ECI Filing requirement **
**Please click here for the GST filing requirement **
APPOINTMENT OF COMPANY OFFICER
- All Singapore registered Pte ltd is mandatory to appoint Company Secretary, Company Director ( who at least 1 director must be local resident )
REASON FROM SOLE PROPRIETOR TO PTE LTD
- Limited liability : You are only responsible for the total amount fund you contribute to Pte Ltd Company, if anything go wrong , your personal asset is protected . Whereas is different scenario with sole proprietor, you are fully responsible include disposal off your personal asset if necessary.
- A sole proprietor business is not “transferable” : If the sole proprietor owner retire or dies, same thing will happen to its company. Whereas scenario will be different in Pte Ltd, owner’s kid can inherit his business .
- loan or Fundraising is much more easy in Pte Ltd compare with sole proprietor .
OK, i ready, let contact email@example.com to proceed