Published on December 9, 2011
According to section 5 of the Business Registration Act, generally, all forms of businesses must be registered with ACRA. Regardless of whether you’re thinking of forming a sole-proprietorship, a partnership, a company, a limited liability partnership or a limited partnership, you will need to register.
However, certain entities are exempted from registration. For instance,
- Licensed hawkers (who are required to instead register with NEA .
- Craftsmen working privately in their own domestic premises, who do not display their goods publicly and do not employ the services of non-family members.
- Taxi drivers (who must register with the taxi companies)
- Trishaw riders
- Farmers or pond keepers (For more detailed information, refer to the First Schedule of the Act )
In addition, certain societies and charitable organisations do not need to register with ACRA, though they may need to register with other governmental organs.
According to ACRA, even blogshops are required to register. In addition, as online content providers, they would have to abide by certain rules. However, given the prevalence of these online businesses, it is likely that some remain unregistered.
Failure to register
Failure to register may result in fines or even imprisonment. Moreover, contractual rights may be unenforceable by an unregistered business owner. For instance, an unregistered blogshop owner,
who has delivered his products to a client who has defaulted on payment, may find himself without legal remedies to reclaim the payment. (Though, in certain meritorious cases, an unregistered business owner may apply to the court for special relief.)
How to register
To register your business, simply follow the instructions on the ACRA website. Different charges may apply for different business entities. In addition, certain names may be deemed inappropriate. For instance, offensive or obscene names “Suck-Eggs LLP” may be deemed inappropriate and prohibited from registration. In addition, ACRA also has the power to refuse registration of names which are too similar to existing brands. For instance, McDollars.
If you’re the owner of a start-up business and you’re unsure about the pros and cons of different business entities, do check out GuideMeSingapore. as well as ACRA .
Different business entities offer different protection from full liability. For instance, creditors of companies probably are not allowed to claim against the personal assets of the company owner, since a company is a different legal entity from the owner. In contrast, creditors of a partnership are probably allowed to claim against the personal assets of the partners, in the event that the partnership assets are insufficient to repay the debt, since the partners constitute the partnership. Furthermore, companies are required to comply with more bureaucratic regulations.
Category: Personal Finance