Guide to Limited Liability Partnership (LLP) – Fundamentals

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Table of Contents

Last updated: August 27, 2019
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Content of Guide:

  1. What is a Limited Liability Partnership (LLP)?
  2. How do I register a Limited Liability Partnership (LLP)?
  3. General compliance of a Singapore Limited Liability Partnership (LLP)
  4. Advantages of a Singapore Limited Liability Partnership
  5. Disadvantages of a Singapore Limited Liability Partnership
  6. Tax implications for a Singapore Limited Liability Partnership

What is a Limited Liability Partnership (LLP)?

A Limited Liability Partnership (LLP) in Singapore must have at least two or more partners wholly registering a partnership entity to be recognized as a separate legal personality – i.e. it can sue or be sued and has the right to own property in its own name.

The LLP combines the operational flexibility of a partnership with the limited liability features of a company. This shields co-partners from liabilities due to the willful misconduct or gross negligence of one partner or a group of partners. All of its partners are liable up to the limit of their contributions and they are not personally liable for the debts and obligations of the LLP except in situations where those debts and obligations arise as a result of their own negligence / fraudulence. The mutual rights and duties of the Singapore LLP and its partners are governed by the limited liability partnership agreement.

The partners in a LLP can be either an individual or a corporation. A minimum of two partners are required by law but there is no cap on the number of partners an LLP can have.

No minimum contribution is required but each partner has to disclose his contributions to the Registrar and the Registrar needs to be notified if a limited partner wants to withdraw the capital contribution.

How do I register a Limited Liability Partnership (LLP)?

You must have the following information prior to the registration:

  • Proposed name of the Limited Liability Partnership
  • Particulars of the LLP partners/managers as per the foreign passport or Singapore Identity Card
  • Residential address of the LLP partners/managers
  • Declaration of compliance
  • Details of the registered address for the LLP
  • Consent to Act as Manager and Statement of Non Disqualification to Act as Manager
  • In case the partner is a company: Registration details of the company such as registration number, jurisdiction, registered address, etc.

After which, the LLP can be registered with Accounting and Corporate Regulatory Authority (ACRA) of Singapore. In most cases, it is recommended to have a professional services firm execute the registration for you. There are two main steps: a) name reservation; and b) registration of the entity.

Contact us and we’d be happy to advise and assist with your Limited Liability Partnership registration.

General compliance of a Singapore Limited Liability Partnership (LLP)

  • LLP is required to keep its books up-to-date so as to substantiate all the transactions and financial position of the LLP, failure to do so may lead to prosecution and penalties.
  • An LLP in Singapore is not required to file its accounts or have them audited. Nor does it need to disclose its capital.
  • The manager of an LLP must submit to the Registrar an annual declaration of solvency or insolvency; such declaration must be lodged within the first 15 months from the date of the registration of the LLP. Subsequently a declaration once in every calendar year must be submitted at intervals of not more than 15 months.
  • Every limited liability partnership must ensure that its invoices and official correspondence bear the statement that it is registered as an LLP, and the name and registration number of the limited liability partnership must be visibly printed on all its bills, invoices and official correspondence.
  • Any changes to the particulars of the LLP must be lodged with the Registrar within 14 days from the date of change.

Advantages of a Singapore Limited Liability Partnership

  • Separate legal entity, hence partners are not personally liable for losses or debts, or wrongful acts of other partners. However a partner is personally liable for claims against his personal wrongful acts or omissions.
  • It has perpetual succession. Any change in the partners of a LLP does not aff ect its existence, rights or liabilities.
  • Compliance requirements are simpler as compared to private limited company.
  • No annual returns filing required of LLPs, except for income tax.

Disadvantages of a Singapore Limited Liability Partnership

  • Constraints in transfer of ownership
  • Does not command a distinguished image as a private limited company.

Tax implications for a Singapore Limited Liability Partnership

Singapore LLP, though a tax resident, is not considered as a company entity; therefore its profit is taxed at personal income rate. In the event where a partner is a company, its share of profit will be taxed at tax rate for companies.

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