Around 1 in 3 people have a side hustle. And the number seems to keep increasing. It can most likely be turned into a full-time profitable business if you have a side-hustle. But when it’s the right time to do so?
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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
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.
There are still some drawbacks:
That’s why it’s better to trust this matter to professionals like Osome.
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.
We submit a Name Application to ACRA along with a "Name Appeal Letter" so you can use your old company name.
We move your assets, bank accounts, and other matters from the existing Sole Proprietorship to your new Pte Ltd company before the cessation date.
When the cessation date lapses, your SP will be automatically terminated. You don't need to send any notices of cessation to ACRA.
We take care of the application and handle the process online
Shutting down SP and opening Pte. Ltd. under the same name
Good for a small company or a business with a settled structure
on top: changes +$50/E
89% of customers recommend us
9,500+ clients worldwide
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part of an ecosystem
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.
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.
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.
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.