Sole Proprietorship conversion to Pte Ltd
There’s a point when your Sole Proprietorship is ready to convert. You’re making a sound profit and pay way too much taxes, there’s a lot of responsibility on you personally, you are limited in your fundraising options and you want to involve other partners or hire employees. Pte. Ltd. is the next step for businesses that keep growing.Get started
Let’s talk process
What is Pte Ltd?
A private limited company (Pte Ltd) is the most popular business entity in Singapore. Limited liability means that the company's liability is limited to shareholders' shares.
In private limited companies, profits are subject to corporate tax, but dividends are tax-free for the shareholders.
Advantages of converting
- You won’t be legally responsible for all lawsuits filed against your business.
- Sole proprietors face a greater risk of financial ruin than directors of private limited companies.
- You can enjoy tax benefits that a sole proprietor won’t have, such as tax exemptions.
- Your capital is not limited.
- You can find a successor if you happen to leave the business
- You have a greater chance of partnering with serious businesses
Are there any difficulties?
There are still some drawbacks:
- A company's dissolution is a complex task
- Such companies are more difficult to manage
- Pte Ltd in Singapore must comply with stricter rules and regulations from the Singapore Companies Act
That’s why it’s better to trust this matter to professionals like Osome.
Fret not! Sit back and relax. We handle everything
File the cessation of Sole Proprietorship
We will file "Cessation of Business" with ACRA when you decide to open a Pte Ltd, or within 6 months. You have time to transfer SP business and contracts to Pte Ltd.
Incorporate a Pte Ltd Company
We submit a Name Application to ACRA along with a "Name Appeal Letter" so you can use your old company name.
Transfer your business matters
We move your assets, bank accounts, and other matters from the existing Sole Proprietorship to your new Pte Ltd company before the cessation date.
Termination of Sole Proprietorship
When the cessation date lapses, your SP will be automatically terminated. You don't need to send any notices of cessation to ACRA.
Let’s talk money
We take care of the application and handle the process online
Convert from SP to Pte. Ltd.
Shutting down SP and opening Pte. Ltd. under the same name
1 year Essential Secretary
Good for a small company or a business with a settled structure
- S$60 Annual Filing government fee included
- Corporate Secretary routine Annual Filing and AGM preparation
on top: changes +$50/E
- Non-share related changes S$50
- Share related change S$100
- Corporate shareholder S$100
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Is it cheaper to run a Pte. Ltd. than a Sole Proprietorship?
Pte. Ltd. is more expensive to manage — you have to hire a corporate secretary and file annual returns to ACRA. But taxes are super low thanks to a flat rate and a lot of exemptions. If you do the math, it turns out it’s cheaper to convert after you’ve made more than S$32,857 a year in profit. And if you make S$90,000 a year, you’ll save S$4,200.
What is the process like?
Converting is really just closing down your Sole Proprietorship and opening a new company. The only thing you can keep is the name. We’ll send an appeal to ACRA to transfer that to your new Pte. Ltd. After that, we will incorporate your new business within an hour. The rest has to happen within 3 months — new bank accounts, assets, contracts, licenses. We also inform ACRA about proprietorship termination.
What exactly has to happen?
We’ll help you re-sign all the contracts (rent, suppliers, clients) to the new company. Same goes for bank accounts: we close the old ones, and open new ones to the company name. If your business needs a license, we’ll apply for a new one — these cannot be transferred. Consider which assets you want to transfer. We’ll help process selling or leasing them.
What are the benefits of Pte. Ltd.?
Limited liability protects you from risks, like having to pay company debt from your pocket. Another plus with Pte. Ltd. is that you can involve other partners or pass your business to your heirs. And fundraising is easier.