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Limited Liability Partnership

A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from that of an unlimited partnership. In an LLP, some partners have a form of limited liability similar to that of the shareholders of a corporation.

  • Characteristics

    • Legal entity

      A LLP is a legal entity can sue or be sued in its own name and can own or hold any property.

    • Partners

      A LLP must have a minimumof 2 partners.There is no maximum number of partners in a LLP. Partners can be individuals or companies.

    • Convert from existing company

      A LLP can be created by conversion from an existing company to an LLP.

    • Tax rates

      Individual partners will be taxed at personal tax rates. Company partner will be taxed at corporate tax rates.

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  • Advantages and Disadvantages

    • Limited liability

      LLP partners are not liable for the wrong of other partners.

    • Perpetual succession

      Any changes in the LLP for instance resignation or death of partners do not affect its existence, rights or liabilities.

    • Easy to administrate

      LLP do not need to audit their accounts or file annual returns.

    • More attractive to investors

      Investors may be more willing to join as silent partners as liability for partners is limited.

    • Unlimited liability

      LLP partners are personally accountable for all debts and losses from their own careless actions.

    • No tax excemption for individual partners

      Individual partners of LLP cannot enjoy first three years S$100,000 taxable income tax exemption offered to Company.

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  • Compliance

    Company Name

    Company name must be approved before the incorporation of the Singapore company may occur and the name must be in English.

    Bad names might be rejected by Singapore authority:

     

    • Identical or too similar to another business name/existing tradmarks.
    • Contains offensive or vulgar word.

     

    Registered Address

    All singapore registered company must provide a local Singapore address as the registered address of the company. The registered address must be a physical address and cannot be a PO Box.

    Partner

    Any individual above 18 years old or any company can be the partner of a LLP. 100% local or foreign ownership is allowed. However, certain individuals (e.g. bankrupts and persons convicted of offences involving fraud or dishonesty) are not allowed to be a partner of a LLP.

    Local Manager

    A LLP must appoint a local manager if all partners is not a "local resident" in Singapore.

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  • Required Documents

    • Proposed business name

    • Register address

    • Brief description of business activities

    • Partners particulars

      Foreigners: Copy of passport, overseas residential address proof.

      Singapore local residents: Copy of Singapore NRIC.

      Corporate entity: Copy of registration documents, Memorandum & Articles of Association.

       

Want to set up a limited company? See Singapore company