Many yoga teachers in Singapore who want to move from teaching for a studio to starting a yoga business (i.e. building a professional practice) often start off slowly and on an informal basis, such as renting studio space by the hour, collecting payment directly etc. This does feel simpler and more straightforward.
However, over time, the lack of structure can limit what is possible. Without a registered business entity, it may be difficult to open corporate bank accounts, hire staff, rent premises or have one’s personal assets protected in the event of a claim.
To some, the question of business structure may feel like a purely administrative decision, something to deal with at the start (i.e. the point of registration) and then forget about. In reality, it is a strategic choice that determines how you operate, how you are taxed, how you appear to landlords and corporate clients, and (perhaps most importantly) what happens to your personal assets if a claim is made against your business.
What a business structure determines
Your choice of business structure affects four things that will matter to every yoga teacher who is building a professional practice.
The first is liability – who is legally responsible if something goes wrong. As we have explored throughout this series (especially the sections on liability as well as waivers and indemnity clauses), liability is a real consideration for yoga teachers, and the structure you choose will determine whether that liability is borne by the business entity or by you personally.
The second is taxation. Income earned through a sole proprietorship is taxed as personal income. Income earned through a company is taxed at the corporate rate, which may be lower, particularly as income grows. The right structure at S$30,000 of annual revenue may not be the right structure at S$120,000.
The third is credibility. Landlords, corporate clients, and banks generally prefer dealing with incorporated entities. A private limited company, by virtue of being a separate legal entity, signals permanence and professionalism in ways that a sole proprietorship does not.
The fourth is continuity. As a company has a separate legal identity from its founders, it can continue to exist if you step back from teaching, and the company can also be sold or transferred. A sole proprietorship, by contrast, is synonymous with and inseparable from you – it stops when you stop.
The four main options
Sole proprietorship is the simplest form. You trade under your own name or a registered business name. Registration with the Accounting and Corporate Regulatory Authority (ACRA) is straightforward and inexpensive, compliance requirements are minimal, and you retain full control over all decisions.
The trade-off is unlimited personal liability. If the business owes money or is sued, your personal assets – e.g. savings, property, vehicles etc – may be at risk. There is no legal separation between you and the business. For freelance yoga teachers or solo practitioners testing the market, this may be an acceptable risk. For anyone running a studio, employing staff, or generating significant revenue, the exposure is harder to justify.
General partnership involves two or more individuals carrying on business together. It is simple to set up and allows the sharing of resources, skills, and costs. However, each partner is personally liable for the debts and obligations of the business – including those incurred by the other partner. Without a written partnership agreement, disputes about profit-sharing, workload, or exit can escalate quickly.
A cautionary example – two yoga teachers begin running classes together informally and split income equally. As the classes grow, they rent a space under one partner’s personal name. When debts accumulate, the partner whose name is on the lease bears sole liability for the losses, even though both benefited from the income. Had they incorporated a company or limited liability partnership, the obligations could have been shared transparently and personal exposure limited.
Private limited company (Pte. Ltd.) is the most common structure for yoga studios and wellness businesses in Singapore. The company is a separate legal entity, meaning that it can own assets, enter into contracts, and sue and be sued in its own name. The company is liable for its own debts and obligations; the directors’ and shareholders’ personal assets are generally protected.
The advantages go beyond liability protection. Companies are easier to scale; bringing in investors, additional shareholders, or new directors is straightforward. Corporate tax rates and exemptions may be more favourable than personal income tax at higher revenue levels. And operating through a company gives your brand an identity distinct from you personally, which makes it easier to sell or continue the business in future.
The drawbacks are cost and compliance. Setting up a company is more expensive, and ongoing requirements – such as annual returns, accounting records, possible audit obligations – add administrative overhead. Directors also have legal duties under the Companies Act, including the duty to act honestly and to avoid conflicts of interest.
Limited liability partnership (LLP) combines elements of a partnership and a company. Like a company, it is a separate legal entity, and partners are not personally responsible for the debts and obligations of the LLP or the wrongful acts of other partners – liability is limited to the capital contributed. Like a partnership, it offers flexibility in internal structure and profit-sharing arrangements.
As LLPs are much less common in the wellness industry than private limited companies, parties such as landlords and clients may be unfamiliar with this business structure. Partners also remain personally liable for their own negligence or misconduct – the LLP protects them from each other’s liabilities, but not from their own.
Which structure is the most appropriate for me?
The appropriate structure for you depends on where you are in your career and what you are building.
If you are a solo teacher just starting out (e.g. teaching freelance at studios), being an employee or independent contractor may be sufficient. If you are building your own personal brand, running private sessions, and/or are testing whether a full-time yoga career is viable, then perhaps a sole proprietorship may be sufficient. The costs are low, the compliance is minimal, and the personal liability risk, while real, is manageable at a small scale.
If you are co-teaching with a partner, sharing costs, and building something together, an LLP provides more protection than an informal arrangement. It limits each partner’s exposure to the other’s liabilities and creates a formal framework for managing the relationship – which matters when money and disagreements enter the picture.
If you are running a studio, employing staff, renting premises, or generating revenue which has moved beyond freelance-level income, a private limited company is the corporate structure to opt for. The liability protection, the tax efficiency at higher income levels, and the professional credibility it provides are difficult to replicate through simpler structures.
Whatever structure you choose, it is worth remembering that restructuring later is possible but often costly and disruptive. Taking time to consider your long-term direction before registering, rather than defaulting to the simplest option, can save significant effort and expense down the line.
This post is part of an ongoing series on legal resources for yoga teachers in Singapore.
The information in this article is for general educational purposes only and does not constitute legal advice. It should not be relied upon as a substitute for professional legal advice. Laws and regulations may change, and the information provided may not reflect the most current legal developments. For advice specific to your circumstances, please consult a qualified lawyer. No solicitor-client relationship is created by reading this content.