There it is, the first day of your new life in your decision to become an entrepreneur. You realise you have many things to do, most importantly, you have to incorporate a company and register your business with ACRA. There are so many forms and documents to plough through before you can even start to getting back to your wares and begin marketing and selling your niche products.
Where do you even begin?
What do you start to look out for?
This article picks out 5 things to look out for when registering a business. Hopefully, these few bullet points can guide you on your journey to becoming a successful entrepreneur. Good luck!
1. Always do your research.
First and foremost, when registering a business and even way before that, always do your research. Research, research, research, know your product, know your business and your market. A successful entrepreneur always looks to conduct proper research of market conditions either online or from other entrepreneurs in the niche. This allows new entrepreneurs to figure out the best approach into the market and ways to cut excess overhead cost. There are others who have paved these roads before you in one way or another, try to learn from their failures and successes and improve on them.
2. Figure out your business partners.
Figure out who your business partners are and what their involvement is in the longer term. If you’re a lone ranger above the age of 18 with sufficient resources and are willing to be taxed at personal income tax rates for your business, then consider a sole proprietorship. If you have a riff raff of family members and friends all willing to invest in your business, such that there would be 21 individual shareholders (more than 20) but that none of you are willing to be personally liable for the debts and losses of your company, explore a private limited company when registering your business. One should familiarize themselves with the numerous legal entity forms available for registration when deciding on the business structure for your new start-up, ranging from sole proprietorship to limited liability partnerships to perhaps even public companies limited by shares. Business formation is important because in the longer term, this impacts many aspects of your growing business, factors relating to whether you would be personally liable for the losses in your business and whether you have enough resources to weather this can affect your businesses’ credibility in customers’ eyes, the ability to take out a loan from financial institutes, your ease of business expansion etc. For example, when considering registering a sole proprietorship, consider if your small business would only be facing minimal risks (the cobbler down the road with very little overheads could be a sole proprietor; there is nothing much that would affect his business but for the weather conditions and if people in the area had soles that frequently wore out but wouldn’t buy new shoes).
3. Office address registry.
Consider where to register your office address. Having a right business address can cut overheads considerably. If you have a very small business that employs only a handful of people, perhaps work from home and use that address to register or utilise the address of a reputable shared working space.
4. Take note of mandatory licensing requirements.
Take note of mandatory licensing requirements for your new business if any. Any new company or business will only be allowed to get the necessary licences after registration with ACRA. Figure out what licenses you need in order to start your business so you don’t run into any problems with the authorities. Say for instance, if you wanted to distribute alcohol, you would then have to apply to the police for an alcohol license before you could even start your business. You don’t want to be in the red with the authorities and be in breach of any laws and have to pay massive fines even before your business takes off the ground. In addition, you should properly read up on the laws in the field of business you wish to start in just in case of any potential licensing issues that may arise in due course. The Singapore authorities have an OBLS (Online Business Licensing Service) which has a wealth of information on specific licensing required when starting a business in Singapore. Refer to that.
5. Employment passes for foreigners.
If you intend to hire foreigners, please note that Employment Passes can only be given out once your business registration is complete. Also, there is a quota on how many foreigners may be employed in various scenarios. Be familiar with this. If in doubt and as a boot-strapped company, try to call an incorporation service provider who might sometimes be able to provide off-the-cuff free advice. Take advantage of using one-stop incorporation and migration companies to avoid all the red tape. These companies can help you register your business for a very flat fee and in the process, answer your various questions about incorporation in Singapore.
BONUS: Watch out for employee compensation insurance
Always remember to watch out for employee compensation insurance as mandated by Singapore’s Work Injury Compensation Act for all employees performing manual work and for employees earning less than S$1600 per month. It is mandatory to obtain insurance for both local and foreign employees and failure to provide adequate insurance is an offense with severe penalties in Singapore.
We understand that starting a business and the path to becoming a successful entrepreneur isn’t always paved with glitter and gold but with the right resources, legally and administratively, that can make your journey a whole lot easier.
Created on 20 July, 2017.