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Conversion from Sole Proprietorship to Company
If you already have a Sole Proprietorship or a Partnership, you could also consider converting it into a Private Limited Company.
The conversion will provide you with the benefits of limited liability, separate legal entity, perpetuity, better perception, and possible tax benefits. However, you will have to consider the draw backs of tighter regulatory and compliance requirements, and cost of conversion.
The conversion will provide you with the benefits of limited liability, separate legal entity, perpetuity, better perception, and possible tax benefits. However, you will have to consider the draw backs of tighter regulatory and compliance requirements, and cost of conversion.
Procedures for Conversion from Sole Proprietorship or Partnership to Private Limited Company
The procedure of the conversion basically involves 3 steps as listed below. Do note that these steps can be a challenge for the untrained and the service of a professional firm should be considered.
Step 1:
A new company will have to be incorporated. You can find out more about this in our Singapore Company Registration Guide. During the registration process, an indication that the company is taking over the business of an Sole Proprietorship or Partnership made. Also a date for the termination/cessation of the business that is going to be taken over must be indicated too. This date can be postdated up to 3 months from the date of registration.
Step 2:
The business that is pending to be terminated will then transfer its assets and contracts to the newly incorporated company. Note that license and permits may need to be reapplied and some contracts which could not be novated will have to be re-signed.
Step 3:
The owner(s) of the business after having completed the above 2 steps, notify the Registrar that it has ceased business by filing a "Notice of Cessation of Business" or a "Notice of Termination of Business".
Step 1:
A new company will have to be incorporated. You can find out more about this in our Singapore Company Registration Guide. During the registration process, an indication that the company is taking over the business of an Sole Proprietorship or Partnership made. Also a date for the termination/cessation of the business that is going to be taken over must be indicated too. This date can be postdated up to 3 months from the date of registration.
Step 2:
The business that is pending to be terminated will then transfer its assets and contracts to the newly incorporated company. Note that license and permits may need to be reapplied and some contracts which could not be novated will have to be re-signed.
Step 3:
The owner(s) of the business after having completed the above 2 steps, notify the Registrar that it has ceased business by filing a "Notice of Cessation of Business" or a "Notice of Termination of Business".
