This will depend on the kind of business vehicle that is being adopted. Under the law in Singapore, sole proprietorships and partnerships are registered under the provisions of the Business Registration Act while bodies corporate and similar legal entities are registered under the provisions of the Companies Act. Under the Business Registration Act, business includes “every form of trade, commerce, craftsmanship, calling, profession and any activity carried on for the purposes of gain but does not include any office, employment or occupation, or any of the businesses specified in the First Schedule (List of exempted entities / individuals).”
This means that every business in Singapore must be registered with the Accounting and Corporate Regulatory Authority (ACRA) except for the exempted categories. Any business activity that is carried out on a continual basis for the purpose of gain including online business must be registered. Failure to register this is punishable by a fine up to $5,000 for a term of imprisonment for a maximum of 12 months. Individuals and companies, which are legal entities in their own right, can set up and register sole proprietorships and partnerships. Sole proprietorships and partnerships, not being legal entities in themselves, cannot set up on register other sole proprietorships partnerships. A foreign company can set up or register a sole proprietorship or a partnership only if it is itself registered under the Companies Act. With effect from 1 September 2009, any person above the age of 18 years can be a sole proprietor or a partner.
A foreigner who wishes to register a sole proprietorship is obliged to appoint a manager who is locally resident as long as he or she resides outside Singapore. A foreigner who wishes to register a partnership in Singapore while he or she continues to reside outside Singapore must have at least one partner who is a local resident. If all the partners recite outside Singapore, they are required to appoint a manager who is a local resident. The MOM will not issue an EntrePass to a foreigner who wishes to register and manage a sole proprietorship or a partnership so foreigners who wish to reside in Singapore and set up a business are advised to seek the approval of MOM before they register the business.
The foreigner carrying out the business who does not have a SingPass has to necessarily engage the services of a professional such as a lawyer, a chartered secretary or an accountant or of a service bureau to submit the online application to ACRA on his or her behalf. Only individuals with a SingPass can submit applications or transact with BizFile which is ACRA’s online filing system. This is because logging into BizFile requires the identification number (NRIC or FIN no.) and SingPass.
Registration is also important because failure to register can result in the person not registering being unable to enforce any rights under any contract without application to the courts for the appropriate relief or a permission to enforce these rights. It is therefore in the interest of every business to register unless it falls within the exempted categories.