Open a Sole Proprietorship on a DP and getting the LoC

[Need_info]

Hi,
This forum is amazing. The information and details shared are IMPOSSIBLE to find on the actual official sites. So a big thank you to the contributors!

I need help with a small detail regarding setting up a sole proprietorship.

I'm on a DP and want to start freelancing as a storyteller. What do I put down as my address for the business? I live in a rented apartment in a condo and am planning to go to other condos/enrichment centres/schools to have my sessions.

Also, what is the best method of payment I should accept? Cheque/cash/card? I'm guessing I need to give an official receipt for all my payments?

[nutnut]

Put your home address, if you are working from place to place then you have no exact location.

That's what my wife did in a similar situation to you.

[Need_info]

Great. Thanks for the address info.

Now for the payments I receive, do I open a separate account? Cheque/cash? When do I start worrying about taxes?

I know I might be getting ahead of myself worrying about taxes when I haven't earned a cent yet, but I want to cover all aspects and not get stuck later.

Tx.

[Strong Eagle]

Great. Thanks for the address info.

Now for the payments I receive, do I open a separate account? Cheque/cash? When do I start worrying about taxes?

I know I might be getting ahead of myself worrying about taxes when I haven't earned a cent yet, but I want to cover all aspects and not get stuck later.

Tx.

You need to open separate accounts for your SP to properly manage it. The problem is one of intermingling of funds. This is often the biggest place that SP's get into trouble... it's not clear what is personal and what is business related when your clients write a check to 'John Doe' instead of 'John the Storyteller'. How do you explain to the IRAS that a check you received as 'John Doe' was for an old appliance you sold off, and not payment received for telling a story?

When you have separate accounts, it makes it easy for you to prove your income and expenses for your business, and that you have not been running personal expenses through your business, although I expect this happens quite often, nonetheless. Note that as a SP, the net income of your business goes directly to your personal income tax form, that is, while you need to report your business activities there is no taxation of the business, unlike a company. Thus, you "worry" about taxes as you would as an individual tax payer.

In terms of payment types, it really doesn't matter, with the following caveats. Cash payments always raise suspicion because the can be under reported and they are hard to trace. If you intend to take cash you should consider sequentially hard numbered invoices/receipts that provide something of an audit trail.

Checks are easy... but you need to make sure that the check is good... and you will run into bad checks... can be hard to collect.

For a small percentage you can hook up with one of several providers that will supply you a credit card reader and an app for your iPhone, iPad, or Android device that will let you scan a credit card on the spot, and complete the transaction via your phone's data plan. The service then transfers the funds to your bank account. Easy peasy but you will pay a couple of percentage points at least.

In general, you need to keep an adequate paper trail, even if on a computer, to show that you have properly reported all income, and that all expense claims are legitimate and allowed by law.

[Need_info]

Brilliant.

Thank you Strong Eagle and nutnut. You have been really helpful. I will be updating you on how it goes.

Fingers crossed.

[wilkie366]

So after waiting for over 6weeks and getting my application escalated, finally I get the news that my LOC has been rejected. I'm a photographer and had applied for a photography SP with all the accompanying documents as specified on the forum. Any recommendations on what I can do next?

[bluebag]

Hi all

Thanks for everyone's contribution. I followed what everyone has suggested and posted my documents about 2 weeks ago. I know the process may take up to 5 weeks, but I would like to know if my application has arrived safely at MoM, so I checked under EP online today and found out I got rejected.

One thing that has always bothered me is "how much I would pay myself". I put business manager as the job title, but I put $2000 for monthly salary, because I don't know how much income the business will generate for me. Could that be one of the reasons? how much do you put down for the salary section? Does it have to be EP level of salary? and what happens if my business can not afford to pay myself that much, would it become a problem when I file my tax at the end of the financial year?

All suggestions are welcomed. Need to figure out what needs to be changed for my next application.

Thank you all for your help!

[sundaymorningstaple]

$2000 isn't even enough to qualify for an S pass, let alone a full EP. You would only qualify for an Work Permit at best. Don't think that's going to get it, but as you have already filed you would have been assigned a FIN number which will always remain until your gain PR or citizenship, even if you increase the salary, I don't think it's going to matter one iota as they already will figure that you gave the correct viable answer in the initial application and further applications will be increases just for show.

Additionally, according to the papers today, LoC approvals have been reduced dramatically over the past three years with only about 1200 given out in 2013 as compared to over 4000 the year before. You might have a rough go of trying to convince them now, that you will be able to pay yourself more.

[Mahima Gupta]

Hi,
Could anyone guide me if the LoC rules for DP holder are different based whether the EP holder is a PR?
I was told that since my husband is not a PR, I cant open a sole-proprietorship on my DP.

Also, I am looking out for job and would like to run my business part time with job. Is that allowed?
This thread also mentions some contact person at MO for this, could you please give me details of that too.

Thanks!!

Yes, it OFFICIAL now!! In the mail today, I received my letter from MOM stating my sole-proprietorship was approved!!

And, to end the confusion over this paperwork and information quagmire, let me make some points:
-If you're a Dependent, you CAN open your own Sole-Proprietorship WITHOUT A *EXPLETIVE* ENTREPASS!!
-Register your business with ACRA first and pay the $65. Then, download the LOC from MOM
- it is NOT illegal to fill out your own LOC if you're on a Dependent Pass b/c I did it and was approved!
-your spouse DOES NOT need to sponsor your business if you're a Dependent-that's the whole point of being a sole-proprietor and signing your own letter of consent
-there is a difference between a company and a business and the ACRA operators aren't trained to answer questions about a sole-proprietorship (business). They are only trained to answer questions about an Entre-Pass. Don't waste your time asking. Instead, take your happy self to the MOM with your 7 documents, take a ticket and insist you need to go to the BLUE ROOM
-you do need to submit 6 additional documents along with your LOC when you send your paperwork to ACRA now (refer to my previous posts for info.)
-I have a contact name for a representative at ACRA should anyone need it (High-five to "Movingtosg" for this!!)



And, last but not least, BEST OF LUCK TO ANYONE WHO IS GOING THROUGH THIS SITUATION NOW. I HOPE I HAVE SOLVED THIS MUCH TALKED ABOUT ISSUE!!

LESLIE

[Mahima Gupta]

Hi,
I cant seem to find the list of documents on the MOM website. I got the form. Could you pls report that list?
I also did not see a requirement for the logo or the stamp mentioned on the website. Would appreciate info about the same.

Thanks a ton!

Today, after an unsuccessful phone call to MOM-never was able to reach the lady "Movingtosg" told me about , I got frustrated and decided to go in person to MOM on Havelock Rd.

When you walk in, an assistant asks you what you're there for. I told her a Sole-Proprietorship and after giving her my FIN number, I was given a number to wait in the Q in the Orange Room (there are three different colored rooms). Just having a feeling I was not in the right room-probably b/c of all the incorrect advice I've been getting-I went to a man behind the information counter to see if he could contact the lady "Movingtosg" had given me. He couldn't get an answer either and confirmed I had the number right. Oh, well! Back to the waiting room.

So, after waiting AN HOUR-YES, YOU HEARD ME RIGHT- in the Orange Room, my number is called and I make my way up to the assistant ONLY TO BE TOLD THAT YES, I AM IN THE INCORRECT ROOM! IMAGINE THAT-MOM NOT GIVING THE RIGHT ADVICE. I am then guided to the Blue Room where I wait for about 20 minutes more.

FINALLY, my number is called and I get to talk to a Work Pass Manager in a small room. I tell him why I'm there, show him my paperwork, he asks if I'm a Dependent, I say yes and I explain all the paperwork I have brought. I then ask, "I can sign my own LOC as a Dependent, right?" He says, "Yes." So, there's you're answer for that. YES, YOU CAN SIGN YOUR OWN LOC AS A DEPENDENT FILING FOR A SOLE-PROPRIETORSHIP.

Now, I'm told it may take up to 3 weeks for approval, so we will see. Hopefully, like all other cases I've heard about, I'll be approved too.

As of now, here are the directions for applying for a Sole-Proprietorship given you're on a Dependent Pass:
1) Register your business name with ACRA and pay the $65 fee
2) Download and complete the LOC Form from MOM
3) Add the 6 other additional documents I mentioned in one of my earlier posts (the 6th was the signed written paragraph saying I was employing myself). I put my business logo on all forms
4) Make your way to MOM with your paperwork (or you can mail it) on Havelock, get a number and wait in the Blue Room to talk with a Work Pass Manager
5) Wait for a Response from MOM

I hope this helps!

[Popinjay]

Following info on this thread submitted application for a LoC on a DP working as a SP principal consultant - got approval today after 2 weeks wait. Thanks for the info here.

[sundaymorningstaple]

Congratulations. Sounds like you are on your way.

[Mahima Gupta]

Hi,
I cant seem to find the list of documents on the MOM website. I got the form. Could you pls report that list?
I also did not see a requirement for the logo or the stamp mentioned on the website. Would appreciate info about the same.

Thanks a ton!

Today, after an unsuccessful phone call to MOM-never was able to reach the lady "Movingtosg" told me about , I got frustrated and decided to go in person to MOM on Havelock Rd.

When you walk in, an assistant asks you what you're there for. I told her a Sole-Proprietorship and after giving her my FIN number, I was given a number to wait in the Q in the Orange Room (there are three different colored rooms). Just having a feeling I was not in the right room-probably b/c of all the incorrect advice I've been getting-I went to a man behind the information counter to see if he could contact the lady "Movingtosg" had given me. He couldn't get an answer either and confirmed I had the number right. Oh, well! Back to the waiting room.

So, after waiting AN HOUR-YES, YOU HEARD ME RIGHT- in the Orange Room, my number is called and I make my way up to the assistant ONLY TO BE TOLD THAT YES, I AM IN THE INCORRECT ROOM! IMAGINE THAT-MOM NOT GIVING THE RIGHT ADVICE. I am then guided to the Blue Room where I wait for about 20 minutes more.

FINALLY, my number is called and I get to talk to a Work Pass Manager in a small room. I tell him why I'm there, show him my paperwork, he asks if I'm a Dependent, I say yes and I explain all the paperwork I have brought. I then ask, "I can sign my own LOC as a Dependent, right?" He says, "Yes." So, there's you're answer for that. YES, YOU CAN SIGN YOUR OWN LOC AS A DEPENDENT FILING FOR A SOLE-PROPRIETORSHIP.

Now, I'm told it may take up to 3 weeks for approval, so we will see. Hopefully, like all other cases I've heard about, I'll be approved too.

As of now, here are the directions for applying for a Sole-Proprietorship given you're on a Dependent Pass:
1) Register your business name with ACRA and pay the $65 fee
2) Download and complete the LOC Form from MOM
3) Add the 6 other additional documents I mentioned in one of my earlier posts (the 6th was the signed written paragraph saying I was employing myself). I put my business logo on all forms
4) Make your way to MOM with your paperwork (or you can mail it) on Havelock, get a number and wait in the Blue Room to talk with a Work Pass Manager
5) Wait for a Response from MOM

I hope this helps!

Thankyou

[echoyuqi]

Put your home address, if you are working from place to place then you have no exact location.

That's what my wife did in a similar situation to you.

I am a tutor, and work from place to place. And MOM still asked me for 'Tenancy Agreement of the place where applicant is going to work at'.

Anyone had this issue before?

thanks

[Strong Eagle]

Put your home address, if you are working from place to place then you have no exact location.

That's what my wife did in a similar situation to you.

I am a tutor, and work from place to place. And MOM still asked me for 'Tenancy Agreement of the place where applicant is going to work at'.

Anyone had this issue before?

thanks

Businesses need to have a fixed address for the service of papers, tax documents, etc. Use your home address.