I am a sole proprietor and would like to convert it to a pte ltd company. However, we have existing contracts with clients which we would also like to bring over to the pte ltd. Is there any documentations (e.g. letter of agreement) that is required of the sole proprietor to state that all liabilities, assets and contacts be transferred to pte ltd?
No doubt, it is a matter of right hand going to the left hand but I would prefer to have all documentations in place for legal and accounting purposes. Any help would be appreciated and wishing every1 here GONG XI FA CAI!
If you wish to convert a sole proprietorship to a private limited company in Singapore you must:
1. Incorporate a new company: At the point of
Singapore company incorporation, you may indicate that the company is going to take over the business of the sole proprietorship. You must indicate the date of termination of the business (which can be postdated up to 3 months).
2. Transfer Business Matters from existing business to new Pte Ltd company
a. Assets - The net assets taken over by the Pte Ltd company can be converted as paid up capital. As such an agreement and resolutions are required. You will have to pay any outstanding dues to the creditors before transferring your assets.
b. Bank Accounts - You must close all banks accounts maintained by the sole-proprietorship firm and open a new bank account(s) under the Pte Ltd company.
c. Office Lease - If you are renting an office, you will need to re-sign the lease agreement under the Pte Ltd company.
d. Contracts / Service Agreements - You will need to re-sign existing business contracts / service agreements under the new entity.
e. Licences/permits - You will have to get new licenses or permits (as licenses and permits usually cannot be transferred).
3. Terminate the SP: Once the company is incorporated, the SP must be terminated within 3 months from the date of incorporation. This should be followed by a Notice of Cessation issued to ACRA confirming the closure of the sole proprietorship within 3 months from the date of incorporation of the private limited company.
It is highly recommended that you seek professional help if you plan to convert your existing Singapore business into a Pte Ltd company. You can contact Janus Corporate Solutions Pte. Ltd. - a Singapore-based firm that provides complete range of Singapore company incorporation, accounting, tax and related compliance services. You can visit their website at
http://www.guidemesingapore.com/ They are known to provide credible service at affordable rates.
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