Exploring New Opportunities: Starting Your Entrepreneurial Journey
Chandra Mohan [Managing Director]
Founder / Senior Audit Partner / FCA [Singapore] / FCCA / CPA [Aust] / MBA
Published 08 May 2025
Exploring New Opportunities: Starting Your Entrepreneurial Journey
In today’s rapidly evolving job market, where automation, artificial intelligence, and global economic shifts are reshaping industries, lifelong employment is no longer guaranteed. For many, this has sparked a desire to seek greater financial independence and career flexibility. In Singapore, we’ve seen a growing number of individuals-especially mid-career professionals-embracing self-employment, trades, and entrepreneurship as a way forward. Starting your own business is an exciting step, but laying the right foundation is critical to your success. One of the most important decisions you’ll make is selecting the correct business structure. This choice affects how your business operates, your tax obligations, personal liability, and even its long-term potential.
Fortunately, Singapore offers a variety of business structures to suit different needs, including sole proprietorships, partnerships, private limited companies, and limited liability partnerships (LLPs). Each structure comes with its own advantages and challenges, so it’s essential to assess your goals, operational requirements, and risk tolerance before making a decision. This blog aims to help you explore these options while inspiring you to take the first step toward turning your passion or idea into a thriving business.
Why Does This Choice Matter?
- Liability and Risk Management
- Sole proprietorships and partnerships expose your personal assets to business risks. In contrast, private limited companies (Pte. Ltd.) or LLPs limit liability to business assets, safeguarding personal finances. This is essential for high-risk trades like home renovations or elderly care.
- Taxation and Financial Planning
- Sole proprietors are taxed at personal income tax rates, which may not be the most beneficial for growing businesses. On the other hand, private limited companies enjoy corporate tax rates and are often eligible for start-up tax exemptions, making them well-suited for scalable operations.
- Lifespan and Renewal Requirements
- In Singapore, business lifespans vary:
- Sole Proprietorships and Partnerships: Require to be renewed with ACRA (either yearly or every 3 years); failure to renew can result in cessation.
- Private Limited Companies and LLPs: These enjoy perpetual lifespans, as long as statutory obligations like annual filings are maintained.
- In Singapore, business lifespans vary:
For long-term business aspirations, private limited companies and LLPs are generally more favourable.
- Operational Flexibility
- Sole proprietorships and partnerships are easier to establish, but they may not provide the same level of credibility and funding opportunities that are available to private limited companies.
To help you decide, we’ve included a comparison table below that highlights the key differences between various business structures. Use it as a quick guide to identify the best option for your needs.
COMPARISON BETWEEN BUSINESS STRUCTURES
| Sole Proprietorship | Partnership | Limited Liability Partnership (LLP) | Limited Partnership (LP) | Company | |
| Definition | A business owned by 1 person | An association of 2 or more persons carrying on business in common with a view of profit | A partnership where the individual partner’s own liability is generally limited | A partnership consisting of 2 or more persons, with at least 1 general partner and 1 limited partner | A business form which is a legal entity separate and distinct from its shareholders and directors |
| Owned by | 1 person | Generally, between 2 to 20 partners A partnership of more than 20 partners must incorporate as a company under the Companies Act, Chapter 50 (except for professional partnerships) | At least 2 partners, no maximum limit | At least 2 partners; 1 general partner and 1 limited partner No maximum limit | Exempt Private Company –20 members or less and no corporation holds beneficial interest in the company’s shares Private Company – 50 members or less Public Company – can have more than 50 members |
| Legal Status | Not a separate legal entity Owner has unlimited liability Can sue or be sued in individual’s own name Can own property if individual has legal capacity Owner personally liable for debts and losses of business | Not a separate legal entity Partners have unlimited liability Can sue or be sued in firm’s name Cannot own property in firm’s name Partners personally liable for partnership’s debts and losses incurred by other partners | A separate legal entity from its partners Partners can be individuals or a body corporate (company or other LLP) Partners have limited liability Can sue or be sued in its own name Can own property in its own name Partners personally liable for debts and losses resulting from their own wrongful actions Partners not personally liable for debts and losses of LLP incurred by other partners | Not a separate legal entity General partner has unlimited liability Limited partner has limited liability Cannot own property in LP’s name General partner is personally liable for debts and losses of the LP Limited partner not personally liable for the debts or obligations of LP beyond amount of his agreed contribution | A separate legal entity from its members and directors Members have limited liability Can sue or be sued in its own name Can own property in company’s name Members not personally liable for debts and losses of company |
| Registration Requirements | Age 18 years or above, Singapore citizen / Singapore permanent resident / EntrePass holder If the owners are not resident in Singapore, he must appoint an authorized representative who is resident in Singapore Self-employed persons must top up their Medisave account with the CPF Board before they register a new business, become the owner of an existing business name or renew their business registration | Age 18 years or above, Singapore citizen / Singapore permanent resident / EntrePass holder If the owners are not resident in Singapore, they must appoint an authorized representative who is ordinarily resident in Singapore Self-employed persons must top up their Medisave account with the CPF Board before they register a new business, become an owner of an existing business name or renew their business registration | At least 2 partners, who can be an individual (at least 18 years old) or body corporate (company or other LLP) At least 1 manager who is an individual ordinarily resident in Singapore (at least 18 years old and not disqualified under the Companies Act) | At least 1 general partner and 1 limited partner. Both can be individuals (at least 18 years old) or body corporate (company or other LLP) At least 1 manager ordinarily resident in Singapore (at least 18 years old) if all the general partners are not “ordinarily resident” in Singapore Self-employed persons must top up their Medisave account with the CPF Board before they register as a partner of a new LP, become a registered partner of an existing LP, or renew their LP registration
| At least 1 shareholder At least 1 director ordinarily resident in Singapore (at least 18 years old and not disqualified under the Companies Act) If a foreigner wishes to act as a local director of the company, he can apply for an EntrePass/Employments Pass from the Ministry of Manpower |
| Formalities and Expenses | Quick and easy to set up Easy to administer and manage Registration cost is low Less administrative duties Must renew registration before the expiry date | Quick and easy to set up Easy to administer and manage Registration cost is low Less administrative duties. Must renew before the expiry date | Quick and easy to set up Fewer formalities and procedures to comply with as compared to a company Registration cost is low and fewer regulatory duties to adhere to than a company No statutory requirement for general meetings, share allotments, etc. Only an annual declaration of solvency must be lodged by the manager stating whether the LLP is able or not able to pay its debts during the normal course of business | Quick and easy to set up Easy to administer and manage Registration cost is low Less administrative duties Must renew registration before the expiry date | Higher cost to set up and maintain More formalities and procedures to comply with Must appoint a company secretary within 6 months of incorporation Must appoint an auditor within 3 months after incorporation unless the company is exempt from audit requirements Annual Returns must be filed. Statutory requirements for general meetings, duties of director/company secretary, share allotments, etc. must be complied with
|
| Taxes | Profits taxed at the owner’s personal income tax rates | Profits taxed at partners’ personal income tax rates | Profits taxed at partners’ personal income tax rates (if individual) / corporate tax rate (if corporation) | Profits taxed at partners’ personal income tax rates (if individual) / corporate tax rate (if corporation) | Profits taxed at corporate tax rates |
| Continuity & Transferability | Exists as long as the owner is alive and desires to continue the business | Exists as long as the partners agree | The LLP has perpetual succession until wound up or struck off | Exists as long as the partners agree and as long as all of the general partners remain in the partnership If there is no limited partner, the partnership will be suspended and will be converted to a firm registered under the Business Names Registration Act Once a new limited partner is appointed, the registration of the LP will be restored to “live” | A company has perpetual succession until wound up or struck off Ownership of a company can be transferred and additional shareholders can be appointed. |
| Closing the Business | By the owner or authorized representative by filing a Notice of Cessation of Business By Registrar – if the registration has expired and has not been renewed | By the partners – by filing a Notice of Cessation of Business By Registrar – if the registration has expired and has not been renewed | Winding Up – Voluntarily by partners or creditors, compulsorily by the High Court Striking Off | By general partner – cessation of business or dissolution of LP By Registrar – if the registration has expired and has not been renewed | Winding Up – Voluntarily by members or creditors. compulsorily by the High Court Striking Off |
Here are some recommended business structures for the trades mentioned in this blog. As your business expands or your needs change, you can transition to a more advanced structure, like a private limited company, to enhance scalability and build credibility.
Sole Proprietorship
A sole proprietorship is the simplest and most flexible business structure. It is ideal for individuals who want to start small and operate independently, especially in trades that require low capital and minimal administrative effort.
Best suited for example:
- Home-based businesses and that can be managed independently, such as:
- Home-Based Bakery or Catering Services
- Tuition Services
- Freelance Writing or Content Creation
- Pet Grooming Services
- Virtual Assistance Services
- Urban Farming Specialist
- Plumbing Services
- Electrical Maintenance and Repairs
- Air-Conditioner Installation and Maintenance
- Handyman Services
- Pest Control Specialist
Pros:
- Easy and inexpensive to set up.
- Full control over the business.
- Requires minimal compliance and paperwork.
Cons:
- Not a separate legal entity; the owner is personally liable for debts and obligations.
- May face challenges in raising funds or scaling operations.
Partnership
A partnership is a business structure where two or more individuals come together to share resources, responsibilities, and profits. It is ideal for trades or businesses that benefit from collaboration or require diverse skills.
Best suited for example:
- Trades requiring complementary skills, such as:
- Interior Design Consultancy Services
- Event Management Services
- Landscaping and Gardening Services
- Senior friendly Home Renovation Specialists
- Wedding and Event Planners
- Custom Cake Designer or Baker
- Sustainable Product Designer
- Graphic Design and Digital Marketing
Trades requiring complementary skills often thrive in environments where businesses can scale with multiple partners. By leveraging the unique strengths of each partner, these collaborations can enhance service offerings and improve operational efficiency. For instance, a partnership between a plumber and an electrician can create a comprehensive service package for clients, allowing both trades to benefit from shared resources and customer bases. This synergy not only maximizes the potential of each trade but also enables the business to expand its reach and capabilities through strategic alliances, ultimately driving growth and innovation in the marketplace.
Pros:
- Shared responsibility and workload.
- Pooling of skills, expertise and resources.
- Easier to raise capital compared to a sole proprietorship.
Cons:
- Partners are personally liable for business debts.
- Potential for disagreements between partners.
Private Limited Company (Pte. Ltd.)
A private limited company is a separate legal entity from its owners. It offers limited liability, making it suitable for businesses that involve higher risks, have potential for growth, or require external funding.
Best suited for example:
- Trades with high growth potential or requiring significant investment:
- E-commerce Store
- Technology Educator for Seniors
- Virtual Reality (VR) Developer for Seniors
- Assistive Technology Developer
- Elderly Nutrition Product Developer
- Solar Panel Installation
- CCTV and Security Camera Installation
- Smart Home Installer
- Digital Artist or NFT Creator
- Personal Wellness Trainer
- Senior Travel Consultant
Pros:
- Limited liability for shareholders.
- Easier to raise capital from investors.
- Perceived as more credible and professional.
Cons:
- Higher setup and compliance costs.
- Requires more administrative work, including annual compliance filings.
Limited Liability Partnership (LLP)
An LLP combines the flexibility of a partnership with the limited liability of a company. It is ideal for professionals or tradespeople who want to work collaboratively but also limit their personal liability.
Best suited for:
- Professional services or trades requiring collaboration:
- Physiotherapy or Occupational Therapy
- Financial Planning for Seniors
- Legal Advisor Specializing in Elder Law
- Intergenerational Program Coordinator
- Photography and Videography Services
- Cultural and Arts Program Organizer for Seniors
- Senior Concierge Services
- Elderly Caregiver Training
- Dementia Care Specialist
- Elder-Friendly Home Renovation Specialist
- Urban Farming Specialist
- Sustainable Product Designer
Trades involving multiple stakeholders rely on collaboration among parties with vested interests to achieve shared goals. For example, a financial planner specializing in seniors could partner with a legal advisor in elder law and an intergenerational program coordinator. Together, they provide seniors with comprehensive financial, legal, and social solutions, leveraging each other’s expertise to address diverse clients’ needs effectively.
Pros:
- Limited liability for partners.
- Partners can manage the business directly.
- Suitable for professional practices.
Cons:
- Requires compliance with LLP regulations.
- Balancing profit can be challenging
- Partners are taxed individually.
General Recommendations
Based on those trades generally mentioned in this blog:
- If you are starting small and working independently, sole proprietorship would be a good option.
- For collaborative businesses involving partners with diverse skills, consider a partnership or LLP.
- For trades with growth potential or requiring significant investment, a private limited company is ideal.
Conclusion: Unlock Your Entrepreneurial Potential
Starting a business is an exciting journey filled with possibilities, and understanding the right business structure is a small but crucial first step. This blog aims to provide you with a basic understanding of how to structure your business and the potential opportunities waiting to unfold.
Whether you’re exploring new trades, pursuing a passion, or dreaming of becoming your own boss, the right foundation will set you up for success. As your ideas grow and evolve, remember that your business structure can adapt too – allowing you to scale and meet new demands.
Take this as your opportunity to dive deeper into the possibilities and discover how your passion can turn into a thriving business. If you’re unsure where to start or need guidance to make informed decisions, don’t hesitate to seek professional advice. The right support can make all the difference in your entrepreneurial journey.
Your future is full of potential – embrace it and take the first step toward realizing your dream!
No matter where you are in your entrepreneurial journey, choosing the right business structure is essential. Let us help you build a strong foundation for success.
At S C Mohan PAC and its affiliate firms, we understand the challenges of starting and growing a business. From payroll and bookkeeping to GST compliance, tax filing, and technology integration, our tailored solutions let you focus on what you do best.
Whether you’re starting out, pursuing a passion, or scaling your business, we’re here to support you.
As your business grows, we can guide you in transitioning to advanced structures, like private limited companies, to unlock greater opportunities.
Let’s work together to turn your entrepreneurial dream into a thriving reality
Contact us today to see how we can help!
📞 Call us today: +65 9144 1840
📧 Email us: Ying Fen @ accounts_1@scmohan.com.sg or Ms Rukoo @ office@scmohan.com.sg
Your journey starts here – let’s make it a success, together! Remember, entrepreneurship is not just about starting a business; it’s about exploring new possibilities, innovating, and creating something meaningful. Take the first step with confidence and unlock the endless opportunities waiting for you.
Disclaimer
This blog provides general insights and inspiration and is not a substitute for professional advice. Business decisions, including choosing a structure, have significant legal and financial implications. Always consult qualified experts for tailored guidance.
