Looking to register your bustling side hustle as a business?
Registering your business has several benefits for freelancers and solopreneurs. It boosts your legitimacy, which can help attract more clients. It allows you to issue legal tax invoices.
That’s not all! Registering your business also gives you access to government assistance programs for small businesses down the road. This can be a big help if you need a little boost to get going.
One more thing: if you’re thinking about expanding your business in the future, having a formal structure in place can be a big help.
Here’s a non-exhaustive list of the things you need to know (and do)!
1) Register your business name
You can check the availability of your proposed business name with ACRA (the Accounting and Corporate Regulatory Authority) and register it online. The name must be unique and not resemble any existing company name. Currently, this will cost SGD15, alongside SGD300 in business registration fees. You will then be issued a Unique Entity Number (UEN) at no extra cost.
When registering your business with ACRA, you have two options: an exempt private company or a regular private company. An exempt private company has fewer legal requirements but some restrictions, so most new businesses choose to register as regular private companies. You will need to submit various documents, including a name reservation letter, memorandum and articles of association, address proof, identification documents for all company directors, and company registration fees. Get these ready before you begin!
ACRA has helpful How-To guides to take you through the process. These cover topics like tax filing, annual filing requirements, and changes to company information. You can also attend their seminars and workshops to learn more. GoBusiness also has a startup guide that demystifies the process.
Alternatively, some individuals engage the help of professional companies to take the stress off their minds.
2) Obtain the relevant licenses and permits
Depending on your industry and business activities, you’ll need to check with government agencies about what licenses and permits you require. You may also need an occupational license.
If you are supplying cosmetic products, for example, you must ensure you have notified the Health Sciences Authority (HSA). This is compulsory even if another company has notified, and those who fail to do so will pay a fine of up to $20,000 and/or receive imprisonment for a term of up to 12 months[i].
Will you be using your home as your office or place of operations? While you won’t need a license, you still need to ensure that your business meets the criteria of either the Home-Based Business Scheme or the Home Office Scheme.
3) Decide on your business’s legal structure
You have options like sole proprietorship, partnership, limited liability partnership or private limited company. ACRA’s website lists the details of the pros and cons of each structure. These include things such as liability, tax obligations, and scalability. Evaluate your specific circumstances and consult with a legal or financial professional, if need be, to make an informed decision.
Chances are high that you’ll begin with a sole proprietorship, where you’re the only shareholder, or as a private limited company.
4) Open a business/corporate bank account
You’ll need a local Singapore bank account to receive payments and pay bills. Many banks have packages for small businesses. These packages offer you perks such as lower initial deposits and minimum balances, for example. Some banks even have accounts that have inbuilt accounting-related solutions.
According to ACRA, you can apply for a corporate bank account with ANEXT Bank, Bank of China, CIMB, DBS Bank, Maybank, OCBC Bank, State Bank of India or UOB via BizFile+ immediately after registration.
5) Register for taxes
You’ll need to register for GST (Goods and Services Tax) if your annual revenue exceeds S$1 million. While most side hustles will take a while to see this amount, you may qualify for voluntary GST registration if certain conditions are met. Currently, new start-up companies can enjoy tax rebates for the first consecutive three Year of Assessments. However, cetain requirements must be met.
IRAS has a New Company Start-Up Kit, which newly incorporated companies can sign up for to guide them through their first filing obligations with IRAS (Corporate Income Tax Return) and ACRA (Annual Return).
We hope this guide offers some clarity into the process of registering a business! As this guide only provides a really brief overview, it’s advisable to consult with professional service providers, such as lawyers, accountants, or incorporation specialists, who can offer personalised advice based on your specific business requirements.
Good luck with your business ventures!