Registering a Business in Singapore: Do I Need to and How?
As prescribed by section 5 of the Business Names Registration Act (BNRA), all types of businesses except those exempted (see below) must be registered with the Accounting and Corporate Regulatory Authority (ACRA).
Business refers to any activity that is carried out on a continual basis for the purpose of gain. This includes online or web-based businesses such as running online stores as well as home-based businesses, such as those selling home-baked goods.
Therefore, before carrying on a business in Singapore, every person must first register their business.
Benefits of Registering a Business in Singapore
Apart from complying with the legal regulations, registering your business is also beneficial.
To customers and suppliers, a registered business appears more legitimate because information on your business can be searched and verified via ACRA. As a result, your business will find it easier to obtain financing and contracting on credit.
Furthermore, registration will allow you to be protected from liability (i.e. should your business be sued or incur debts, you will not be personally liable) if you choose to incorporate a company or register a Limited Liability Partnership (LLP).
Exemptions from Registration of Business
If you intend to carry on your business as an individual under only your full name, you are exempted from registration.
Similarly, if you carry on business with one or more other individuals, you would be exempted from registration if the name of the firm is the full name of all the individuals.
However, if your business name includes descriptive words before or after your name, such as “Home-Baked Cakes by Lim Ah Kao”, you must register your business.
Some other exemptions include:
- Any institution, authority, person or fund whose income is tax-exempt, as specified in the First Schedule to the Income Tax Act;
- Any society registered under the Societies Act or the Co-operative Societies Act;
- Any mutual benefit organisation registered under the Mutual Benefit Organisations Act; and
- Any trade union registered under the Trade Unions Act.
Can Foreigners Register Businesses in Singapore?
Foreigners are allowed to register businesses in Singapore. In fact, they are generally required to. This is unless, they are carrying on business in Singapore in the name of a foreign company that has already been registered under the Companies Act.
However, if all the partners or officers running the registered business do not reside in Singapore (either at the point of or after registration), at least 1 authorised representative must be appointed to discharge obligations of the business.
The authorised representative must be:
- Ordinarily resident in Singapore;
- At least 18 years of age; and
- Of full legal capacity.
You may wish to refer to our guide on how foreigners can set up a business in Singapore to read more about the required procedures.
Considerations Before Registering a Business in Singapore
Before registering your business, here are some considerations you will need to decide on:
- Business structure;
- Business name; and
- Registered business address.
Choosing a business structure
The first important choice to make would be to choose a business structure based on your considerations regarding capital, number of owners and risks.
If you are the only person running your business, you may wish to register as a sole proprietorship which has less administrative requirements and requires less management.
If you intend to form a business firm with one or more other partners, you may wish to register as a partnership. A partnership does not have to file its accounts or have them audited.
If your partners and you wish to limit your liabilities by not being personally liable for the partnership’s debts, a LLP may be ideal.
If you intend to expand your business and would like to raise capital more easily in the future, you may wish to incorporate a Singapore company. This would be a separate legal entity which would similarly allow you to limit your liabilities.
Choosing a business name
Secondly, you will have to decide on a business name. You should run an online Google search to find out if your proposed name has already been used by a currently registered business, or if it is extremely similar to the name of such a business.
Additionally, you should also run your proposed business name through the entity search function on the BizFile+ website, which is ACRA’s online filing and information retrieval system.
You may refer to the guidelines on selecting a business name issued by ACRA to make the process of choosing a business name more efficient.
If the name you have chosen has been used before or is extremely similar to a used business name, ACRA will refuse to register it.
Choosing a business address
Lastly, you will also need a business address.
If you do not intend to rent any office space, consider registering your home address as your business address under the Home Office Scheme.
This is a residential scheme by the Housing and Development Board (HDB) and the Urban Redevelopment Authority (URA) which allows you to run an approved small-scale registered business from your home address.
Only certain types of businesses are eligible for this scheme. Your business should also not disturb or cause inconvenience to your neighbours.
In order to use your home address as your business address, HDB flat owners or occupiers must submit an online application to HDB, while private residential property owners must submit an online application to the URA.
How to Register a Business in Singapore
To register your business, you may make an online application via the BizFile+ website. The application itself may only take about 15 minutes to complete.
However, certain types of business require approval from certain regulatory authorities before they can be registered. Such businesses include architecture, real estate and defence. Getting such approval may require an additional 14 working days to 2 months.
Depending on the type of business you intend to register, you may need to seek approval from the relevant regulatory authority before starting your application to register on ACRA.
In other cases, the regulatory authority may only get involved in approving your registration after it has been submitted to ACRA. You may wish to refer to this ACRA webpage for more information.
Required information for the online application to register your business
For the online application, you will require:
- A SingPass login;
- Entity information (number of years of registration, commencement date, entity name);
- Business activity;
- Business address;
- Details of owners of business; and
- In-principle approval from referral authorities (if required).
Fees for registration of businesses
For sole proprietors, partnerships and LLPs, the registration fees for a 1-year registration is $115 while the registration fees for a 3-year registration is $175.
For a company, it is a standard incorporation fee of $315 which includes the registration of a business name.
Failure to Register Your Business
Failure to register your business may result in a fine of up to $10,000, or even imprisonment of up to 2 years, or both.
Another consequence of failing to register is that any contractual rights may be unenforceable by an unregistered business owner.
For instance, an unregistered blogshop owner being owed money by a client may find himself without legal remedies to reclaim the payment as their contract with the client cannot be enforced.
(Though, in certain meritorious cases, an unregistered business owner may apply to the court to be allowed to enforce their legal rights.)
What to Do After Registering Your Business
Upon registering your business, you will be issued a business profile containing details of your business as well as a Unique Entity Number (UEN) (i.e your business’ identification number).
The UEN must be used when transacting with government agencies.
Should your business require any licences, you may apply via GoBusiness prior to running your business. Otherwise, you may run your business immediately upon its successful registration.
Renewal of registration
After the period of registration has expired, your registration will have to be renewed. There is a renewal fee of $30 for 1 year, or $90 for 3 years.
This is unless you have incorporated a company, as company registrations do not expire.
Late renewal or failure to renew business
A penalty of up to $250 may be imposed for late renewal.
Additionally, for a sole proprietorship or partnerships, the registration will expire once it has lapsed and was not renewed. However, the business name remains registered until the registration is cancelled.
Carrying on a business after its registration has lapsed is an offence, for which the defaulter will be liable upon conviction to a fine of up to $10,000 or a term of imprisonment of up to 2 years or both.
What Happens If the Business Closes Down?
If the business unfortunately has to close down, there are some requirements on closing a business that may be applicable.
For sole proprietorships or partnerships, you must notify ACRA that the business has ceased by filling in the “Cessation of Business” transaction online via BizFile+.
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