Singapore Limited Liability Partnership Setup
A Limited Liability Partnership (LLP) is a perfect blend of a Sole Proprietorship with Private Limited Company setup.
What are the benefits of starting a
Limited Liability Partnership?
In a nutshell
What is a Limited Liability Partnership?
Singapore Limited Liability Partnership (LLP) is a type of business structure where two or more partners incorporate a partnership entity that shields co-partners from liabilities due to the willful misconduct or gross negligence of one partner or a group of partners.
For a LLP to exist, there must always be two or more partners. Although Singapore’s Limited Liability Partnership Act of 2005 does not restrict the benefit of LLP structure to certain classes of professionals only, in practice, LLP structure makes the most sense for chartered professions only (such as lawyers, accountants, etc.) when two or more such professionals decide to work together. For a typical entrepreneur however, incorporating a private limited company is the preferred option.
Who can start a Limited Liability Partnership?
- There must be a minimum of two partners. However there is no cap on the maximum number of partners in a LLP.
- The partners can be natural persons or companies
- A partner may cease to be a partner upon his death or dissolution or in accordance with the limited liability partnership agreement (if any) or, in the absence of such agreement, by giving 30 days’ notice to the other partners.
- A proposed new partner requires the consent of all existing partners. Other matters are decided by majority vote, with each partner having one vote.
- Unlike private limited companies, an LLP in Singapore does not have directors, shareholder or secretary, instead the partners own and run the business.
- Every limited liability partnership must appoint at least one manager who is a natural person of at least 18 years of age and who is ordinarily resident in Singapore, a Singapore Citizen or a Permanent Resident.
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Private Limited Company
A Sole Proprietorship is the simplest form of business structure in Singapore. It is mostly only suitable for very small single-owner type business that does not carry any risks.
A private limited company is the most advanced, flexible, and scalable type of business form in Singapore. It’s also the most preferred type of Singapore business entity for serious entrepreneurs.
Frequently Asked Questions
Before setting up and registering your new Limited Liability Partnership (LLP), you would need the following:
- You must have thought of your business name, and it has to be approved before registration.
- You need to have the particulars, such as the NRIC of the partners/managers, including their addresses.
- A minimum of 2 partners is required. If you are an individual, you can consider either setting up a Sole Proprietorship or even a Private Limited Company
- A local physical address of the partnership.
- Declaration of the partnership’s compliance.
- Consent to Act as Manager and Statement of Non Disqualification to Act as Manager.
In most cases, even if you are unsure or confused, please do not worry. Our business setup experts will be there to guide or complete the full process for you, according to your specification and requirements.
Your Singapore partnership must keep and maintain an up-to-date financial statements and accounts so as to substantiate all the transactions and financial position of the entity. Accounting and other financial records need to be maintained for 7 consecutive years.
The manager or partner 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.
Upon receipt of all your documentations, and fully understanding your requirement, our incorporation expert would begin the registration process almost immediately.
Usually, it would take no more than 2 hours for your LLP to be registered, and you can begin operations.
As a LLP, the entity is not required to appoint a company secretary. Though managers and partners must still be aware of the compliance obligations as mentioned above.
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