There are three main forms of doing business in Singapore: Sole Proprietorship, Partnership and Corporation. A sole-proprietorship is a business owned by one person or one company. There are no partners. The sole-proprietor has absolute say in the running of the business. A partnership is a business firm formed by two to twenty partners. Once there are more than twenty partners, the partnership must be registered as a company under the Companies Act, Cap. 50. The Sole Proprietorship and Partnership are often referred as “unlimited company”. The “infinity” or “limited” here refers to the scope of the company’s debt and liability. The responsibilities of the Sole Proprietorships and Partnerships are unlimited, and the responsibilities of the company are usually limited.

From the perspective of taxation, owners of wholly-owned enterprises can use sole proprietorship to operate their businesses in the early stages of their operations. When business operations are stable and incomes are high, it can be transformed into a corporate form of business to gain greater room for tax planning. The circumstances of each business are different and cannot be generalized. We recommend consulting professional accountants, such as Cohesion Management team, to do tax planning as soon as possible.