Sole Proprietorship And Private Limited Company

Sole Proprietorship And Private Limited Company

Sole Proprietorship is the simplest business structure that can be formed easily with minimal cost and legal formalities.  A single person operates this form of business and the owner is responsible for all the business obligations and losses.  Owner has the entire hold on the business and can run it according to the desired plans without being answerable to anyone.  Owner, being the sole decision maker, is responsible for every decision that may affect the business in both positive and negative manner.  There is no boundary between personal assets and business liabilities.  If owner fails to pay the business debts, the creditor may recover it by consuming the personal assets of the owner, hence leading to unlimited liability.  Owner may face difficulties in raising the capital in such form of business.  There is no difference between the owner and the business because Sole Proprietorship is not a separate legal entity.  Therefore, the business gains are added together with the owner’s income from other sources and taxed at progressive individual income tax rates, with the current highest personal income tax rate at 22%.

Private Limited Company is another business structure that a single entrepreneur can also opt for. The form of business that can be established with minimum 1 shareholder. Unlike Sole Proprietorship, it follows the concept of limited liability that restricts the contribution of shareholders, in paying the business debts, to the investment of the shareholder. Contrary to the Sole Proprietorship, this form of business offers ease of raising capital by adding a new shareholder or issuing shares to the existing shareholders that allows the inflow of capital for business expansion.  Corporate tax is levied at a fixed rate (currently, 17%) on the profits earned, resulting in reduced personal income tax rates.  Dividends distributed, to the shareholders, from the profits (net of taxes) are not taxable in their individual income tax returns.  Certain government incentives or claims, available for Private Limited Company, are not applicable in Sole Proprietorship.  Private Limited Company has statutory responsibilities, including but not limited to maintain registers of company officers, conduct annual meetings with minutes and financial statements prepared for submission to statutory bodies.  Unlike Sole Proprietorship, there is no single authority to make final decisions for the business.  Every shareholder has the right to vote in the decision making during the general meetings.

Might Glory Corporate Solutions is one of the leading Corporate Service Provider companies in Singapore. We specialise in company incorporation, corporate secretarial, nominee directorship, accounting and bookkeeping, corporate and individual tax services, financial reporting, and administrative support services. Contact us today for any clarification between Sole Proprietroship and Private Limited Company matters or any related to your business needs.

PayNow Corporate – Its Pros And Cons

PayNow Corporate – Its Pros And Cons

PayNow Corporate, a new paradigm in the world of cashless transaction. The fund transfer service uses an innovative technology that links a bank account with an entity’s Unique Entity Number (UEN). This enables corporate businesses and Singapore Government agencies to make instant fund transfers without prompting the sender for the recipient’s bank name or account number.

The advantages in using PayNow Corporate include:

1. This feature reduces the transaction time, cost, and hassle in processing the transaction.
2. The method does not only allow greater convenience, but also uses the established security standards to ensure secure fund transfers.
3. Unlike in mobile wallets, the sender does not have to recharge the wallet for transferring the money, making it more user-friendly.
4. Users also have the option to process transactions using the mobile app or through internet banking.
5. Transfers are processed instantly.

Challenges to using PayNow Corporate include:

1. The availability of an active internet connection and the use of appropriate devices are required for users to enjoy the benefits of PayNow Corporate.
2. The app could appear too complex and confusing for tech-challenged people.
3. While bank account details are shrouded in the transaction processing, pre-registration of bank accounts is a pre-requisite to using the service. This requirement could scare off traditionalists from taking the initial step in joining the cashless society.

Why Companies Should Outsource Their Payroll?

Why Companies Should Outsource Their Payroll?

Back-office activities, such as managing accounts, payroll and other financial responsibilities, are non-core functions within a company.  A non-core business function is neither being the central of a business nor a profit centre (meaning, the function costs are not charged to customers and the company recognized them as overheads).  Several long-term benefits from outsourcing non-core functions have been acknowledged by many professionals and business owners.

Time consuming

A company has to comply with a wide range of rules and regulations so as to meet the responsibilities as an employer for statutory purpose.  This recurring activity would consume the working hours and remove the focus away from the core activities.  Although it may not help to improve the business performance, payroll is one of the critical business functions.  If the function is not carried out properly, it could adversely affect the business in many areas, such as the company’s reputation and the employee morale.

Team of experts

Payroll processing requires sound knowledge on the complex rules and formulas, such as different CPF contributing rates for different age groups, pro-ration of an incomplete work month, encashment of annual leaves and work flow required for a leaving foreign employee.  The board has to ensure that the skills and knowledge of the human resources (HR) departmental staff are updated with the regular changes in the statutory requirements.  Otherwise, the management might also be involved to assist during audits.  The payroll agent will be accountable to reply auditors or statutory boards during audits and attend to employees if they are doubtful on the amounts received or taxed.

Cost savings

The regular payroll service fee is mostly lower than a full headcount cost (comprising basic wage, bonus, provident funds, costs of training and staff benefits).  In addition, software subscription fee or maintenance cost for desktop software could be excluded in your budget planning.  Payroll service packages, flexible to cater clients’ needs, are available from basic to complex payroll duties.  Typically, the professional payslips and computational reports, available in the basic package, are sufficient for internal purpose.  The payroll agent would also send out timely reminders to clients when there are upcoming events which need responses from the principal.  For instance, the request for additional information (outside payroll reports) to prepare the annual income statements (i.e. Form IR8A) is one of the such events.


The advantages of outsourcing payroll function to a professional third-party agency are inter-related.  From the reduction in the administrative inconvenience, risks of errors and involvement to the savings in time and money, the decision to outsource allows more time to focus on the business core.

Mighty Glory Corporate Solutions offers professional payroll and other affordable corporate-related services. Please feel free to contact us to get a better quote.

Replacement of FRS 17 With 116 (IFRS 16): Leases

Replacement of FRS 17 With 116 (IFRS 16): Leases

In 2016, the International Accounting Standards Board (IASB) published a new accounting standard IFRS 16, Leases.  The Accounting Standards Council (ASC) of Singapore, in following the IASB, announced the equivalent standard for leases, FRS 116.  This will come into effect from January 2019 onwards, replacing the current FRS 17, with early adoption permitted.

This Standard is applicable to all leases, including leases of right-of-use assets in a sublease, except for those leases which are applying other standards.

The primary change that FRS 116 entails is that lessees will now use a single lessee model.  Previously, under FRS 17, leases could be categorised as capital or operating leases.

FRS 116 implementation is expected to be challenging for businesses with many lease contracts.  This stems mainly from the high financial obligations of implementing it, which includes establishing a consolidated database of the existing lease contracts and transactions, as well as revising prior accounting information to meet the requirements of FRS 116, where necessary.

The financial implication of implementing FRS 116 is the expected increase in leverage ratio (long term solvency) due to the increase in financial liabilities and decrease in equity.  Current ratio (liquidity) would be decreased as well; current liabilities will increase, provided that the current assets remain at status quo.  Meanwhile, the non-current assets amount is not reporting the exact value of assets owned by the business because leased assets are included in the lessees’ books. Businesses might consider purchasing assets rather than leasing and prioritising service contracts over leasing assets.

Nevertheless, FRS 116 assists in enhancing transparency because of the disclosure requirements in the financial statements, such as the net effect of the sale and leaseback transactions and expenses on leases of low-value assets and short-term leases.

Do you have other questions regarding the new accounting standard FRS 116 in Singapore or any concern about accounting works on leases? Talk to the accounting experts in Singapore. Contact Mighty Glory Corporate Solutions today and discuss with us your needs.

Implementation Of CorpPass Replaces SingPass With Effect From 2018

Implementation Of CorpPass Replaces SingPass With Effect From 2018

SingPass Update:

Businesses can still login to access statutory e-services with SingPass before 31 August 2018.  On 1 September 2018, only users with a CorpPass account can access.


Since 25 March 2017, all local businesses can use a new corporate digital identity (CorpPass) to access the Government-to-Business (G2B) digital services in Singapore.

With the increased digitalisation of businesses and platforms, a high volume of business transactions is being conducted through digital platforms with SingPass. However, there are security concerns over the sharing of SingPass login details with other individuals for transactions with statutory boards, such as ACRA, IRAS and CPF Board.

CorpPass allows for the conflation of such e-services – as a single corporate digital identity, it enhances the convenience and ease of management for businesses. For businesses that carry out transactions with multiple government agencies, CorpPass will remove the need for multiple login identities. Businesses can also allocate CorpPass’s various administrative roles to employees, allowing them to have a greater level of control and management.

Businesses have to obtain their CorpPass via online application.  The use of SingPass will cease on 31 December 2017.  From 1 January 2018 onwards, business entities can only transact with ACRA with the CorpPass accounts registered.

Do you have other related questions about CorpPass? Get in touch with Mighty Glory today, let’s discuss your business needs.

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