Step-By-Step Guide On How To Convert Your Sole Proprietorship or LLP To Pte Ltd In Singapore

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Step-By-Step Guide On How To Convert Your Sole Proprietorship or LLP To Pte Ltd In Singapore


Converting a sole proprietorship or limited liability partnership (LLP) to a private limited company (Pte Ltd Company) in Singapore is a relatively straightforward process. It requires the business owners to go through the necessary legal and administrative steps, such as registering with the Accounting and Corporate Regulatory Authority (ACRA), acquiring the necessary licenses, and setting up the company's bank accounts. This guide will provide an overview of the steps that need to be taken in order to successfully convert your business from a sole proprietorship or LLP to a Pte Ltd in Singapore.

Definition Of Pte Ltd And LLP

Pte Ltd and LLP are two of the most common business structures in Singapore. Pte Ltd stands for Private Limited Company and LLP stands for Limited Liability Partnership. Both of these business structures have their own advantages and disadvantages.

A Pte Ltd is a private company that has limited liability, meaning that the company shareholders are not personally liable for any debts incurred by the company. It also has a separate legal entity, meaning that it can own property, enter into contracts, and sue or be sued in its own name. This makes it a preferable option for businesses looking to raise capital from investors or take on debt financing.

An LLP is a business structure where two or more partners share profits and losses equally while having limited liability protection from each other's debts. This means that each partner is only liable up to the amount they have contributed to the partnership, making it an attractive option for entrepreneurs who don't want to risk their personal assets in case of a financial loss or lawsuit against the partnership. If you are interested in starting an LLPS, you should speak with a legal professional first to ensure that it is the best structure for your company.

Benefits Of Converting To Pte Ltd

Converting to a private limited company (Pte Ltd) offers numerous benefits to businesses. It allows businesses to protect their assets and reduce their personal liability. It also provides them with access to more capital, as well as the opportunity to expand their business operations and attract investors.

Additionally, it offers greater flexibility when it comes to taxation, allowing companies to save on taxes (tax benefits) by taking advantage of certain exemptions. Finally, converting to a Pte Ltd also makes it easier for businesses to establish themselves as a legitimate company entity and gain trust from customers.

The concept of a separate legal entity is an important one for businesses in Singapore. Under the Companies Act, private limited companies are considered to be independent legal entities that are distinct from their owners. This means that the business and its owners are treated as two separate personalities, with each having its own assets and liabilities. This separation provides protection for the business owners from any financial, criminal, or fiduciary duty issues that may arise from the business’ activities.

Having a separate legal identity also allows shareholders to make decisions on behalf of the business without taking personal considerations into account. This helps to ensure that all decisions made by the company are based solely on what is best for the company itself and not influenced by any personal interests of its owners.

Steps For Seamless Conversion

In Singapore, a Limited Liability Partnership (LLP) is great as in nature of business for SMEs and start-ups. However, as the business grows, it may be beneficial to convert an LLP into a Private Limited Company (Pte Ltd). To do so, there are certain eligibility criteria that must be met. We will also look at the various steps involved in the process for conversion and the advantages of making such a change.

What Do I Need To Consider When Converting From LLP To A Pte Ltd?

To be eligible for company conversion, the following criteria must be met:

The company has been set up in Singapore for at least 3 years.

The company must have possession of the Certificate of Incorporation.

The company's name will not change during the conversion process. This is because this process is only applicable to firms that were previously called LLP's but are now looking to switch their status and become a Pte Ltd.

The private limited liability companies registered with Company Registrar who wish to convert cannot contain any letters other than those in the company's name. A company cannot be registered with Company Registrar as its sole director, but can act through a Limited Liability Partnership or a General Partnership.

What Steps Are Needed To Prepare:
Requirements After Conversion

First Step: No Objection Letter (*if you want to retain the business name and also state whether the companies are owned by the same person)

As the sole proprietor/ partners, writing a letter expressing no objection to a private limited company using your business name is the initial step. After completion of the process, the sole proprietorship/LLP business will be terminated.

Second Step: Memorandum and Articles of Association (when incorporating a Singapore company)

The next step is to incorporate the current business as a private limited company with the same name as the sole proprietorship. This new company must include:

  • A minimum of one resident director;
  • A minimum of one shareholder;
  • A minimum of one corporate secretary is required;
  • A starting capital of at least SGD1;
  • A physical address in Singapore that has been registered.

After meeting all the requirements, the business can be registered as a private limited company in Singapore. Gather needed and other supporting documents and fill out the application form, then wait for ACRA's approval.

Third Step: Amending Business Assets To A Newly Incorporated Company After Approval

After the application for a private limited company is approved, transferring any assets from the sole proprietorship/ partnership entity - such as contracts, licenses, and bank accounts - must be done through official channels.

Assets - Before transferring net assets to the new Pte Ltd, any unpaid debts of the sole proprietor/partnership must be paid and resolved first.These net assets subsequently become part of the paid-up capital for the Singapore business, and are not counted as its income.

Bank Accounts - Upon incorporation of a private limited company, the bank accounts associated with the sole proprietorship must be transferred to the new company within three months. The prior account should be closed and all future payments and bank transfers should be made out to the new business.

Contracts - All existing agreements for the sole proprietorship should be transferred to the private limited company in addition to signing new contracts with the private limited company.

Licenses - Government licenses cannot be transferred, so the private limited company will need to reapply for them once their incorporation is finalized.

Final Step: Business Closure As A Sole Proprietorship

To complete the total conversion, the termination of the sole proprietorship must be legally acknowledged. Once the incorporation is verified by ACRA, they will inform that the sole proprietorship has officially been registered as a Singapore private limited company and is no longer in operation.

Requirements Before Conversion

If you are a sole proprietor, partner, or member of a limited liability partnership (LLP) in Singapore, you may want to convert your business to a private limited company (Pte Ltd) for various reasons such as limited liability protection and easier access to funding. However, there is no direct conversion process, and you will need to set up a new Pte Ltd and "port" your business over to the new entity. The requirements for conversion steps are as follow.

- Obtain approval from all partners

Before starting the conversion process, you need to obtain approval from all partners in the LLP to convert the business to a Pte Ltd. This is necessary to ensure that everyone is on the same page and agrees to the conversion.

- Reserve a company name

Next, you will need to reserve a company name for your new Pte Ltd. You can do this through the BizFile+ portal of the Accounting and Corporate Regulatory Authority (ACRA). You should choose a name that is unique, easy to remember, and reflects your business's nature and values. ACRA will typically take one to two working days to process your name reservation application.

- Prepare the incorporation documents

Once you have reserved a company name, you will need to prepare the incorporation documents for your new Pte Ltd, including the Memorandum and Articles of Association and the Form 45. The Memorandum and Articles of Association outline the company's objectives, powers, and rules, while the Form 45 is the application for registration of a company. You can use a professional services firm or a legal service provider to prepare the documents for you, or you can do it yourself if you have the necessary expertise.

- File the conversion application

Once the incorporation documents are ready, you can file the conversion application with ACRA through the BizFile+ portal. You will need to submit the application along with the necessary documents and pay the conversion fee, which is currently SGD 50. ACRA will typically take three to five working days to process your conversion application.

- Obtain the new business registration number

After ACRA approves your conversion application, you will receive a new business registration number for your Pte Ltd. You can use this number to register for GST, CPF, and other relevant schemes.

- Update licenses and permits

Finally, you will need to update any licenses and permits associated with your business, including your GST registration and other relevant licenses. You should also update your business contracts, agreements, and other legal documents to reflect the new entity. Additionally, you may need to notify your customers, suppliers, and other stakeholders of the conversion and update your marketing materials and branding accordingly.


Converting your sole proprietorship or LLP to Pte Ltd is an important step for businesses that want to grow and expand. It offers more flexibility when it comes to ownership structure, capitalization and taxation, i.e. one of the major incentives. Furthermore, having the “Pte Ltd” suffix can help with branding and positioning the company in the market.

Overall, the decision to convert from LLP to Pte Ltd is one that should be taken seriously as there are several legal, financial and operational implications involved. It is important for businesses to seek professional advice before making this decision so they can make an informed decision.

Frequently Asked Questions

What is the difference between an LLP and a sole proprietorship?
When it comes to compliance, a private limited company is subject to more regulations compared to a Limited Liability Partnership (LLP), which has fewer requirements to follow. On the other hand, a sole proprietorship, also known as a one-person company (OPC), is easy to set up but is subject to high tax rates. Meanwhile, both a partnership company and sole proprietorship have unlimited liability, making them less suitable for multiple business owners.

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UPDATED AS OF 24 Jul 2024
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