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Sole Proprietor - ACRA and some questions

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allanyeowjj
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Sole Proprietor - ACRA and some questions

Postby allanyeowjj » Tue, 26 Sep 2017 10:55 am

Hi everyone

I intend to set up my own online ecommerce dropship (supplier deliver to customer) business. Here is what i understand about the MUST do and legal in Singapore, but there are still some questions which i would appreciate if you can help me. I am a Singapore Citizen

1. Register with ACRA as Sole Proprietor
- If i have more than 1 domain (website) for my business, do i have to register each domain with ACRA individually or just register one time with ACRA will do? (Note that it will not be like xxxx.lazada.com or xxxx.amazon.com, it will be a domain by itself xxxx.com)

- Similarly, if it is just a one time registration and i have more than 1 domain or multiple websites for my business, how do i set the company name? Does the company name have to be distinction from all the domain names?

-There is a condition for SP in ACRA that Self-employed persons must top up their Medisave account with the CPF Board. As i am still employed now (yet to resign), isn't it the same as now? Does this mean that as a sole proprietor, i have to pay for my own CPF?

2. Register for a business bank account
- From what i understand, a business account needs to be set up as i am not allowed to use personal savings account for my business. As there are people who do not do so to avoid tax.

3. IRAS Income Tax
- What should i do with IRAS for my own business? What is the procedures?

Thanks!

allanyeowjj
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Re: Sole Proprietor - ACRA and some questions

Postby allanyeowjj » Tue, 26 Sep 2017 11:39 am

@Strong eagle

are you able to advise me on this?

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Re: Sole Proprietor - ACRA and some questions

Postby taxico » Tue, 26 Sep 2017 2:09 pm

allanyeowjj wrote:Hi everyone

I intend to set up my own online ecommerce dropship (supplier deliver to customer) business. Here is what i understand about the MUST do and legal in Singapore, but there are still some questions which i would appreciate if you can help me. I am a Singapore Citizen

1. Register with ACRA as Sole Proprietor
- If i have more than 1 domain (website) for my business, do i have to register each domain with ACRA individually or just register one time with ACRA will do? (Note that it will not be like xxxx.lazada.com or xxxx.amazon.com, it will be a domain by itself xxxx.com)

- Similarly, if it is just a one time registration and i have more than 1 domain or multiple websites for my business, how do i set the company name? Does the company name have to be distinction from all the domain names?

-There is a condition for SP in ACRA that Self-employed persons must top up their Medisave account with the CPF Board. As i am still employed now (yet to resign), isn't it the same as now? Does this mean that as a sole proprietor, i have to pay for my own CPF?

2. Register for a business bank account
- From what i understand, a business account needs to be set up as i am not allowed to use personal savings account for my business. As there are people who do not do so to avoid tax.

3. IRAS Income Tax
- What should i do with IRAS for my own business? What is the procedures?

Thanks!


re #1 part 1: your business name does not need to be your domain name or your trade/service marks.

you can/need to only use 1 name during each registration. so if you have 2 domains names that you wish to register as your business names, you will have to register twice (and you will pay twice, and have two business entities).

acra doesn't care about your domain names so long as it's yours (and doesn't infringe on others).

you can also have a trade/dba name.

part 2 - same same, but different. if your business is not active yet, there's nothing to pay. you pay only once you've made >$6k/year.

#2 if you are running a sole-proprietorship, i think you can get away with using a personal account in your name for business but IIRC, acra recommends (?) you keep it separated from your other accounts/dedicate it only for your business. i could be wrong on this though!

regardless, opening a bank account for your business is easy and likely recommended if you will be receiving payments in your business' name.

#3 nothing more than declaring your trade income with a simple P&L statement (revenue-expenses=$x).

btw, you may want to reconsider whether it's worth paying an accountant about $1000/year to operate a PLC instead of SP.
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taxico
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Re: Sole Proprietor - ACRA and some questions

Postby taxico » Tue, 26 Sep 2017 2:16 pm

allanyeowjj wrote:@Strong eagle

are you able to advise me on this?


most of your questions are found on the internet.

SE is a volunteer here. he's not getting paid to answer your questions.

so wait for his reply...!
Aut viam ad caelum inveniam aut faciam

allanyeowjj
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Re: Sole Proprietor - ACRA and some questions

Postby allanyeowjj » Tue, 26 Sep 2017 2:53 pm

taxico wrote:
allanyeowjj wrote:Hi everyone

I intend to set up my own online ecommerce dropship (supplier deliver to customer) business. Here is what i understand about the MUST do and legal in Singapore, but there are still some questions which i would appreciate if you can help me. I am a Singapore Citizen

1. Register with ACRA as Sole Proprietor
- If i have more than 1 domain (website) for my business, do i have to register each domain with ACRA individually or just register one time with ACRA will do? (Note that it will not be like xxxx.lazada.com or xxxx.amazon.com, it will be a domain by itself xxxx.com)

- Similarly, if it is just a one time registration and i have more than 1 domain or multiple websites for my business, how do i set the company name? Does the company name have to be distinction from all the domain names?

-There is a condition for SP in ACRA that Self-employed persons must top up their Medisave account with the CPF Board. As i am still employed now (yet to resign), isn't it the same as now? Does this mean that as a sole proprietor, i have to pay for my own CPF?

2. Register for a business bank account
- From what i understand, a business account needs to be set up as i am not allowed to use personal savings account for my business. As there are people who do not do so to avoid tax.

3. IRAS Income Tax
- What should i do with IRAS for my own business? What is the procedures?

Thanks!


re #1 part 1: your business name does not need to be your domain name or your trade/service marks.

you can/need to only use 1 name during each registration. so if you have 2 domains names that you wish to register as your business names, you will have to register twice (and you will pay twice, and have two business entities).

acra doesn't care about your domain names so long as it's yours (and doesn't infringe on others).

you can also have a trade/dba name.

part 2 - same same, but different. if your business is not active yet, there's nothing to pay. you pay only once you've made >$6k/year.

#2 if you are running a sole-proprietorship, i think you can get away with using a personal account in your name for business but IIRC, acra recommends (?) you keep it separated from your other accounts/dedicate it only for your business. i could be wrong on this though!

regardless, opening a bank account for your business is easy and likely recommended if you will be receiving payments in your business' name.

#3 nothing more than declaring your trade income with a simple P&L statement (revenue-expenses=$x).

btw, you may want to reconsider whether it's worth paying an accountant about $1000/year to operate a PLC instead of SP.


re #1 part 1: your business name does not need to be your domain name or your trade/service marks.

you can/need to only use 1 name during each registration. so if you have 2 domains names that you wish to register as your business names, you will have to register twice (and you will pay twice, and have two business entities).

acra doesn't care about your domain names so long as it's yours (and doesn't infringe on others).

you can also have a trade/dba name.


Regarding this, i was hoping for more clarification. i did check with acra, they mention that i can have just one business name with multiple domains provided that the invoices from the sales of all the domains show the same business name registered

OR registering a new business name with each domain which can be done to avoid the hassle.

Given the business name will not show on the invoice, is it legal,safe to just register for a business name but have multiple domains of different products? If not i got to spend a fee to register a new business name for each domain separately. Also, for SP in acra, how generic can the business name be? If i have multiple domain, can i just put the business name as eg. XXX group or i have to make it more relevant to the products?

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Re: Sole Proprietor - ACRA and some questions

Postby allanyeowjj » Tue, 26 Sep 2017 4:38 pm

Hi everyone,

It is more of the option between this 2.
1. Register for one business name and have multiple domains
2. Register a new business name for each domain

Which is a more viable option?

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Re: Sole Proprietor - ACRA and some questions

Postby x9200 » Tue, 26 Sep 2017 5:41 pm

Domain name is just a name, like a product name or a building name. Why do you think ACRA needs to have any solid link established for the SP registration and such names? That would be weird, your domain expires and what, your company seizes to be legal?

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Re: Sole Proprietor - ACRA and some questions

Postby allanyeowjj » Tue, 26 Sep 2017 6:10 pm

x9200 wrote:Domain name is just a name, like a product name or a building name. Why do you think ACRA needs to have any solid link established for the SP registration and such names? That would be weird, your domain expires and what, your company seizes to be legal?


It is not about the link between business name and domain but rather the possibility of having multiple domains tied to how the business name should be.

Let me state an example. If i have the business name as Abc bags and my first domain sell bags. But subsequently should i have a second domain selling tshirts. Then the business name will not be relevant and i have to spend a fee to change a new business name to say...Abc group (i am not even sure if Acra accepts such generic business name) another reason is because most likely Abc bags will most likely be the business bank name. I just want to standardise things...which leads back to the 2 options on which is more viable under Acra

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Re: Sole Proprietor - ACRA and some questions

Postby x9200 » Tue, 26 Sep 2017 6:24 pm

allanyeowjj wrote:
x9200 wrote:Domain name is just a name, like a product name or a building name. Why do you think ACRA needs to have any solid link established for the SP registration and such names? That would be weird, your domain expires and what, your company seizes to be legal?


It is not about the link between business name and domain but rather the possibility of having multiple domains tied to how the business name should be.

Let me state an example. If i have the business name as Abc bags and my first domain sell bags. But subsequently should i have a second domain selling tshirts. Then the business name will not be relevant and i have to spend a fee to change a new business name to say...Abc group (i am not even sure if Acra accepts such generic business name) another reason is because most likely Abc bags will most likely be the business bank name. I just want to standardise things...which leads back to the 2 options on which is more viable under Acra

A business name is a unique name that identifies you under Acra (along with the No etc.). It doesn't mean you have to have all and every of your products, buildings, trademarks, domains, with the same name as your business name. You register a business "allanyeowjj and his cats", with the profile of selling t-shirts and shoes and you are free to have zillions of domain names selling t-shirts and shoes and none of them needs to be allanyeowjj-and-his-cats.com. You are only limited by potential infringement of IP/tradmarks/etc. Also, the registrants for the .sg TLD normally require to have such link with the ACRA or trade name records, but .com, biz TLD, nobody is going to care.

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Re: Sole Proprietor - ACRA and some questions

Postby allanyeowjj » Tue, 26 Sep 2017 8:47 pm

Does the businsss bank account name have to follow the business name registered with Acra ?

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Re: Sole Proprietor - ACRA and some questions

Postby Strong Eagle » Wed, 27 Sep 2017 12:50 am

allanyeowjj wrote:Hi everyone

I intend to set up my own online ecommerce dropship (supplier deliver to customer) business. Here is what i understand about the MUST do and legal in Singapore, but there are still some questions which i would appreciate if you can help me. I am a Singapore Citizen

1. Register with ACRA as Sole Proprietor
- If i have more than 1 domain (website) for my business, do i have to register each domain with ACRA individually or just register one time with ACRA will do? (Note that it will not be like xxxx.lazada.com or xxxx.amazon.com, it will be a domain by itself xxxx.com)

- Similarly, if it is just a one time registration and i have more than 1 domain or multiple websites for my business, how do i set the company name? Does the company name have to be distinction from all the domain names?


Using a DBA (doing business as) is a very common thing in the business world. For example, your registered business name could be "Happy Trading, SP", but you could be doing business as "Fruits and Flowers". If this were a private limited, I know it is easy to register a DBA. However, I could not find anything on the ACRA website that allows a SP to register a DBA.

The first thing I would do is contact ACRA and find out specifically how you go about registering a DBA. If you can register a DBA, then your tax invoices would have the registration number of Happy Trading and the name Fruits and Flowers.

If you cannot register a DBA, then each name you plan on using will have to be registered separately. ACRA wishes to ensure that people dealing with a business can find you under your business name.

Domain names can be anything that is available. For examply, if it were available you could register http://www.xyz.com and xyz.com would not have to be registered with the ACRA. It's the name of the company present on the webpages that matter. So, if your website company name is Fruits and Flowers and you intend to invoice customers under that name, then that name needs to be registered with ACRA as a DBA or individual SP as noted above.

Let's say you have two website companies... "Fruits and Flowers" and "Amazing Gizmos". Both would be registered names with ACRA, either as DBA (preferred) or as individual SP's, and each would need their own invoice with registration number. However, what the domain URL's for these businesses are does't matter at all to ACRA.

-There is a condition for SP in ACRA that Self-employed persons must top up their Medisave account with the CPF Board. As i am still employed now (yet to resign), isn't it the same as now? Does this mean that as a sole proprietor, i have to pay for my own CPF?


As a current CPF contributor, your Medisave account should altready be topped up... I am sure they will let you know if they disagree. :D As a SP you are not required to make the full CPF contribution, only for Medisave. If you wish, you can voluntarily contribute to your CPF fund.

2. Register for a business bank account
- From what i understand, a business account needs to be set up as i am not allowed to use personal savings account for my business. As there are people who do not do so to avoid tax.

3. IRAS Income Tax
- What should i do with IRAS for my own business? What is the procedures?

Thanks!


Understand that a SP does not separate you and your business. You file your business taxes along with your personal income tax form, using an additional form. Your profits from your business are taxed as ordinary income on your personal tax assessment. If you end up having to create 2 or 3 business entities, you would file 2 or 3 forms. More information available at:

https://www.iras.gov.sg/irashome/Busine ... ss-Income/

You don't _need_ to have a separate business bank account, nor is it required, but, there are good reasons for having a business account.

  1. SP's get into trouble when they start claiming personal expenses as business expenses, and this is easy to do when you are using your personal account for business as well. If you have a separate business account, you can easily demonstrate to IRAS that all your business expenses are legitimate.
  2. If you plan on taking checks, drafts, etc in your business name, then you must have a bank account in that business name. You cannot deposit a check made out to "Fruits and Flowers" into a bank account titled, "John Doe".

Opening an account is easy. You bring your ID and your Bizfile registration to the bank to open a commercial account. Note that your bank account style and ID will be identical to the name of the business on the ACRA Bizfile registration.

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Re: Sole Proprietor - ACRA and some questions

Postby sundaymorningstaple » Wed, 27 Sep 2017 9:08 am

Another reason to create a business bank account (if your business name is not your personal name) is the hassles you have if you have employees and get rebates from the government like Work Fare or other grants/rebates. They will always come in your company name and unless your company has it's own bank account in it's own name, depositing the checks or even GIRO payments will be difficult or impossible.

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Re: Sole Proprietor - ACRA and some questions

Postby allanyeowjj » Wed, 27 Sep 2017 12:55 pm

Alright. I called up Acra, connected to SP. Called twice and spoke to Jason, and another lady.

Told them about DBA, they didn't know what it is about. But anyway i asked them again, there is no issue with the registered business name as ABC company and have multiple websites with different website names. It is just the invoice whereby it is best the invoice shows the registered name and UEN number. to avoid confusion. They didn't know what is DBA, so its abit hard when i try to explain to them

So i guess the option lies with me how i want my registered business name to be in the first place. Just wondering if you guys have plan to start multiple online stores, would you register for the business name as Fruits and Flowers (same as website name) and then changing it to ABC trading once you have expanded to multiple websites or register your business as ABC trading straight?

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Re: Sole Proprietor - ACRA and some questions

Postby taxico » Wed, 27 Sep 2017 6:38 pm

XYZ "trading as" ABC
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Re: Sole Proprietor - ACRA and some questions

Postby Strong Eagle » Wed, 27 Sep 2017 10:15 pm

I am surprised that there are carrots at the ACRA that don't know about DBA's.

Given what you have been told, I would register the business as ABC straight up. I would setup my website as fruitsandflowers.com. I would then issue invoices as "ABC doing business as Fruits and Flowers" with your ABC registration number. All bases covered.

And while it probably won't matter, I would ask the same questions in email so that you have a recorded response from ACRA regarding their position.

Good luck with the business.


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