Change a Sole Trader into a General Partnership in Singapore
Change a Sole Trader into a General Partnership in SingaporeUpdated on Thursday 17th May 2018
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Enterprisers who want to start small businesses in Singapore can choose between two popular types of entities: the sole trader and the partnership. Their decision should be based on the income they plan on earning and on how much they are willing to invest in the business.
Those who have started as sole traders also have the possibility to change the business form once the company has started making more profit. As a matter of fact, there are also cases in which once the sole proprietorship exceeds a certain income threshold it is required to be changed into another type of company.
One of the most usual steps it to change a sole trader into a general partnership in Singapore. Below, our lawyers in Singapore explain the process of transforming a sole proprietorship into a general partnership.
A brief comparison between the Singapore sole trader and general partnership
In order to understand the benefits of transforming a sole proprietorship into a general partnership in Singapore, we have prepared the table below where the characteristics of both types of entities are shown:
|The sole proprietorship||The general partnership|
|Is limited to having a single member||Must have at least two members|
|Must be set up a natural person||Can have a company as a member|
|Must have a local address||Must have a local address|
|Will be applied the personal income tax||Will be levied with the personal or corporate tax depending on the partners|
Our Singapore lawyers can offer more information on the characteristics of each type of company. They can also help register any of the two legal entities.
Steps to change a sole trader into a general partnership in Singapore
Once the business owner has decided to turn the sole proprietorship into a general partnership, he or she must follow the steps below:
- close and de-register the sole trader with the Singapore Companies Register;
- choose a local partner and register the new business form as general partner;
- transfer the assets previously held by the sole trader to the general partnership;
- choosing a business address and applying for new business licenses and permits.
If you want to change and a sole proprietorship into a Singapore general partnership, we invite you to contact our local law firm for assistance. We can also explain the tax benefits of each type of business form.