Pte Ltd, LLP or sole proprietor? Compare the trade-offs.

01Sole proprietor
02LLP
03Private limited

Compare liability, ownership, tax and ongoing admin.

Choose the structure around who owns the business, what could go wrong and how you plan to grow. A cheaper registration does not necessarily mean a cheaper business to run.

Compare the three basics

ACRA's comparison is the starting point:

Structure	Ownership	Main liability distinction
Sole proprietorship	One owner	No legal separation from the owner
LLP	At least two partners	Separate entity; partners remain liable for their own wrongdoing
Pte Ltd	Shareholders	Separate entity; shareholder liability is generally limited

Write down your owners and the biggest realistic risk before choosing.

Sole proprietor: simpler, but personally exposed

This can suit an individual who wants a straightforward business structure. The drawback is personal responsibility for business debts and losses. Business registration needs renewal; profits of an individual owner are taxed personally.

Ask whether a claim or unpaid bill could put your own assets at risk. Low turnover is not the same as low risk.

LLP: a partnership with separate legal status

An LLP can suit people running a business together without company shares. It also needs an eligible locally resident manager. Agree profit sharing, decision-making, departures and disputes in a written partnership agreement.

IRAS taxes the partners on their respective shares of LLP income, rather than taxing the LLP as a company. The partner's own status determines the applicable tax treatment.

An LLP still keeps accounts and files annual solvency declarations: the first within 15 months of registration, then every calendar year, no more than 15 months apart.

Agree the partner responsibilities and budget for ongoing records.

Pte Ltd: shares, continuity and more administration

A company can separate ownership through shares and continue despite changes in shareholders. The trade-off is company-level accounts, tax and statutory administration.

A local company needs an eligible locally resident director and a secretary appointed within six months. An auditor is required within three months unless exempt. Check ACRA's officer requirements.

Company profit is subject to corporate tax rules. Incorporation does not guarantee a lower total tax bill.

Compare first-year and recurring costs, including how you will pay yourself.

Make the decision with your plans in view

Bring your ownership split, risk profile, expected profit, funding plans and annual budget to the discussion. Limited liability is not a shield for personal guarantees or misconduct.

If you may bring in an investor, check how ownership would change under each option. Work permits, licences and overseas owners can add requirements. Decide before signing contracts in the wrong entity's name.