Start-Up Guide for First Time Entrepreneurs
Select a Type of Business Vehicle
Think of a Name for your Business
The name of your business must be suitable and not undesirous in nature. This is the part where all the partners in the business come together and brainstorm on the best name for your business. Your business name will become a brand in your line of business and it is imperative that you get one that everyone is comfortable with.
In some instances, a business name may be called up for additional approval from a referral authority due to the certain use of wordings, which will delay the company registration process. You can refer HERE to find out what are the names and wordings which may delay your registration process.
How to Set Up a Private Limited Company
What to Expect After Your Company is Registered
Unique Entity Number
A unique entity number (UEN) will be generated and tagged to your Company for life. The UEN number is similar to your identification number, and will be used as your company’s identification when corresponding with government bodies like IRAS (tax), CPF (salary), MOM (manpower) and ACRA (Registrar).Letter from ACRA
The directors and the company will receive a congratulatory letter from ACRA roughly a week after your company is registered. This letter will explain in brief your responsibilities as a director of the company and remind you of the future ACRA compliance matters that you will need to fulfill for the Company.Letter from IRAS
The company will also receive a perforated letter from IRAS containing the EASY access code for your company tax matters. The EASY system stands for e-Services Authorisation System, an online system that allows organisations to authorise yourself, your employees or a third party to access e-Services on the behalf of the company. Without any authorisation done, nobody will be able to perform e-filing for tax matters for your Company. The username is your company UEN Number and the password will be a generated password contained in this letter. Please login on the EASY Access portal on IRAS and change the password within 60 days from the date of the letter. This is important for you as the password will expire after 60 days.
Soon, you will receive numerous marketing mailers from Corporate Service Providers (like us) who will list out the range of corporate services that you can sign up. Review these mailers carefully to ensure that you are getting a reasonable deal if you intend to outsource your secretary, accounting and/or tax matters to us or our peers.
In the event you receive mailers that seemingly look like letters from government agencies, please do perform validation checks to ensure that the sender is indeed a valid government agency. We have seen cases of deceptive marketing employed by unethical service providers that have resulted in unnecessary signups, payments and subsequent rectifications.
Open a Company Bank Account
Business Licenses and Permits
|Import/Export business||Food and Beverage business||Real Estate Companies||Retail of Tobacco and/or Liquors|
|Public Accounting Firms||Law Firms||Fund Management Companies||Broadcasting and Publication|
Setting Up Record Keeping System
A proper record keeping system can help business owners monitor payables, receivables, make better business decisions, be aware of the financial status of the company and most importantly, facilitates the accurate and quick reporting of corporate tax filing to IRAS.
In fact, it is compulsory under the Income Tax Act and the GST Act, that you are required to keep your business records for a period of at least five years.
Domain Registration and Setting up of Website
For most businesses, a web presence is necessary in this age of connectivity and in order to have an appropriate email system and a website in place, you will typically need to procure the following:
- A domain name (about $20/year for a .com domain or about $60 for a .com.sg domain)
- A web host (depending on your requirements, annual cost can range from under $100 to as high as thousands of dollars)
- Professional or Freelance Web Developers to create your virtual presence. Typically, simple content based webpages will be less costly while websites with e-cart functions or sophisticated user interfaces will cost significantly more.
Business Card Printing
Getting a Business office
There are various options to build a work base for your business. You can either opt to start off right from a bedroom in your house, get a service office, co-share with a fellow business enthusiast, or lease a unit entirely on your own. It all depends on which option will best suit your spacing needs over the short to mid-term, and whether it is financially viable to do so. For leasing of a unit, typically, you will need to fork out at least 2-3 months’ worth of rental from the onset, with 1 month of prepayment for rental and the remaining amounts being held as rental deposit.
Over the mid to long term lifespan of your business, it will be wise to consider if securing an office unit of your own is a better option over the long run.
Paying the First Salary – CPF Commitment
If you are intending to pay yourself a salary at any point in time, or if you are going to hire your very first local employee, you will need to apply for a CPF number as well as the CPF e-Submission account to contribute CPF amounts into the CPF account of the salary drawing individual.
Failure to contribute CPF will result in fines, arrears and interests to be paid. In severe cases, the offender may be fined up to $10,000 for each offence or jailed up to 7 years, or both.
Hitting the $1M Sales Mark – IRAS GST Commitment
You will need to register for GST on a compulsory basis if:
1. Your taxable turnover for the past 4 quarters* is more than $1 million (unless you are very certain that taxable turnover in the next 12 months will not exceed $1 million).
2. You can reasonably expect your taxable turnover in the next 12 months to be more than $1 million.In the event that any of the 2 scenarios described above occurs, you will need to register for GST within 30 days of the date that your registration liabilities arise.Failure to register for GST when it is compulsory for you to do so, may result in significant financial repercussions as the business is liable for a fine up to $10,000, a 10% penalty based on the GST due from the date which the registration liabilities arise, plus the back-claiming of GST that should have been paid from the date that your GST liabilities arise.
The total amount to be paid to IRAS for this failure may be significant to cause financial trauma for the company.