Pte Ltd vs sole proprietorship vs LLP in Singapore

A Pte Ltd gives limited liability and costs S$315 to register. A sole proprietorship costs S$115 but has unlimited liability. An LLP gives limited liability to two or more partners and costs S$100 to register.

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Most small businesses in Singapore pick one of three structures: a private limited company (Pte Ltd), a sole proprietorship or a limited liability partnership (LLP). The answer to "which one" comes down to personal liability, how many owners there are and how much paperwork you can handle. The facts below come from ACRA, the registrar, and IRAS, the tax authority, and were read on .

How do the three structures compare at a glance?

Point Pte Ltd Sole proprietorship LLP
Registration fee S$315 (S$15 name, S$300 incorporation) S$115 for one year, S$175 for three S$100 plus S$15 name on the LLP fee page
Owners One or more shareholders, up to 50 One person At least two partners
Liability Limited Unlimited, personal Limited, except for your own wrongful acts
Separate legal entity Yes No Yes
Local requirement One resident director Owner is a citizen, PR or eligible FIN holder One local manager
Tax on profits Corporate rates, flat 17% Personal income tax rates Partners' personal or corporate rates
Yearly filing Annual return at S$60, tax return Renewal at S$30 Annual declaration at S$30

ACRA's own structure table lists S$315 against LLP as well. Its LLP fee page lists S$100. Read the amount on the BizFile payment page before you pay. Details for each are on the Pte Ltd page, the sole proprietorship page and the LLP page.

Which structure protects your own money?

A Pte Ltd and an LLP both do. ACRA says company shareholders are not personally responsible for the company's debts and losses, and LLP partners are not responsible for debts caused by other partners. LLP partners remain liable for debts from their own wrongful actions.

A sole proprietorship does not. ACRA says you have unlimited liability and are personally responsible for all business debts and losses. The business is not a separate legal entity, so you sue, are sued and own property in your own name. An ordinary partnership works the same way, and every partner answers for the others' debts.

What does each one cost to register and keep?

Government fees only, from ACRA:

  • Pte Ltd. S$315 once, then S$60 each year for the annual return.
  • Sole proprietorship. S$115 for one year or S$175 for three, with a renewal fee of S$30. The three-year option needs CPF Board conditions to be met.
  • LLP. S$100 plus S$15 for the name, then S$30 for the annual declaration each year.

None of that includes a corporate service provider's own fee, an address service, accounting or tax preparation. We print provider prices only when a provider has published them, and we show none here. See company formation cost.

Who can register each one?

  • Pte Ltd. At least one director who is ordinarily resident and aged 18 or older, and a company secretary who is a real person and not the sole director. Shareholders can be up to 50 (20 for an exempt private company).
  • Sole proprietorship. Owner aged 18 or older, a Singapore citizen, PR or eligible FIN holder, not an undischarged bankrupt, with Medisave up to date.
  • LLP. At least two partners, individuals or corporate, and at least one local manager aged 18 or older.

A foreigner who lives overseas usually cannot register a sole proprietorship, and uses a provider for a company or LLP. See company registration for foreigners.

How is tax different?

For a Pte Ltd, IRAS taxes chargeable income at a flat 17%. New start-ups get an exemption on the first S$100,000 and the next S$100,000 for three years of assessment if they have no more than 20 shareholders. Other companies get a partial exemption. See corporate tax.

For a sole proprietorship, ACRA says profits are taxed at personal income tax rates. For an LLP or partnership, profits are taxed at the partners' personal or corporate tax rates.

Which comes out lower depends on how much profit you make and what else you earn. We do not state a break-even point because it varies with each owner's income. Ask a tax adviser to run your own numbers.

What do you file each year?

  • Pte Ltd. Holds an annual general meeting unless exempt, files an annual return with ACRA and files a tax return with IRAS. See annual return and AGM.
  • Sole proprietorship. Renews its registration and declares profit in the owner's personal tax return.
  • LLP. Files an annual declaration with ACRA, due within 15 months of the last.

How do you choose?

  • If you want to protect your home and savings, and plan to hire or raise money, lean to a Pte Ltd.
  • If you work alone, have little risk and want the lowest cost, a sole proprietorship is the simple route. If it grows, you can later convert it to a Pte Ltd.
  • If two or more owners want limited liability and pass-through profit, look at an LLP.

Banks, landlords and larger customers sometimes prefer to deal with a company. We have no verified data on how often that applies, so ask the party you plan to deal with.

Independent guide, not ACRA

SingaporeCompanySetupGuide.com is not ACRA, IRAS or a provider. We write the rules from official pages and keep the check date visible. Providers pay us when a request we pass on becomes a client, as our how we earn page explains.

When you know which structure you want, use the form on this page. We forward your request to suitable providers, and they reply with their own prices.

Sources

Good to know

Questions people ask

Which is better in Singapore: a Pte Ltd or a sole proprietorship?

A Pte Ltd is a separate legal entity with limited liability, but it has more rules and yearly filings. A sole proprietorship is cheaper and simpler, but you are personally liable for all business debts. The better one depends on your risk and growth plans.

What is the difference between an LLP and a Pte Ltd?

Both are separate legal entities with limited liability. An LLP is owned by partners and its profits are taxed at the partners' rates. A Pte Ltd has shareholders and directors, and the company pays tax at 17% on chargeable income.

Which structure is cheapest to register?

ACRA lists S$115 for a one-year sole proprietorship (S$100 plus S$15 name). An LLP is S$100 plus S$15 on ACRA's LLP fee page. A Pte Ltd is S$315. ACRA's structure table lists S$315 for an LLP too, so check the fee on BizFile.

Do I have to be a Singapore resident to register each one?

A sole proprietor must be a Singapore citizen, PR or an eligible FIN holder. A company needs a resident director. An LLP needs a local manager. Overseas owners usually use a corporate service provider to register.

Can a sole proprietorship turn into a Pte Ltd later?

Yes. Many owners start as a sole proprietor and later incorporate a company to get limited liability. It means registering a new entity, and the details are on our conversion page. Plan for contracts, licences and bank accounts moving across.

How is each structure taxed?

ACRA says sole proprietorship profits are taxed at personal income tax rates, LLP and partnership profits at the partners' personal or corporate rates, and company profits at corporate rates. IRAS sets a flat 17% for companies.

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