A Limited Liability Partnership (LLP) in Singapore provides a fuss free set-up as of a Partnership with features of a Private Limited Company set-up. Partners in the LLP can operate the business as per a Partnership with the advantage of having a separate legal identity. Partners will not be personally responsible for debts incurred during the course of business if it is incurred due to the misconduct of other Partner(s). For example, should a partner, during the course of business incurred debts/ losses due to his own act of negligence or misconduct, liability claims can be made against him/ her as an individual and also his/her personal assets. The other partner(s) who are not involved in the act of misconduct will not be liable personally, hence safeguarding his/her personal assets with their liabilities only limited only to the capital contributed by them to the business. A minimum of 2 partners are required for the set-up.
Who can Register a Partnership in Singapore?
- Individuals; a Singapore Citizen, Singapore Permanent Resident, or an Entrepass Holder who is at least 18 years of age
- Corporate; a Singapore registered company
- Foreigners / Foreign Entities
- A local manager who is either a Singapore Citizen or Permanent Resident and is at least 21 years of age
- A registered filing agent for submission of application
- OR a Partner who is a Singaporean or Singapore Permanent Resident
What to Prepare Before Registration
In Singapore, prior to registration, the business name has to be approved by ACRA (Accounting and Corporate Regulatory Authority) before the Sole-Proprietorship can be registered. The requirements of the name are that:
- It is not identical or similar to another existing Business Entity’s Name
- It must not be vulgar, obscene or offensive
- It must not be banned by order of the Minister for Finance
Should the name does not meet any of the requirements stated above; ACRA will reject the proposed business name.
For Singaporean/ Singapore Permanent Resident – Individual’s Details:
For Singaporean or Singapore Permanent Resident registering for LLP, Singpass is required for the registration. The Individual must not be an undischarged bankruptcy and prior to the registration, the individual must ensure that there is no outstanding amount in his/her Medisave account. These criteria apply for the subsequent renewal of business registration.
- For Foreigners/ Foreign Entities – Managers:
For Foreigners regardless of their residency, they are required to appoint at least one local manager in order to register for a LLP in Singapore. The same applies for Foreign Entities. It is important to note that the manager to be appointed must be an resident in Singapore which meant that he/she has to be a Singapore citizen, a Singapore permanent resident, a person who holds an Employment Pass, EntrePass or a Dependants’ Pass.
- For Foreigners/ Foreign Entities – Registered Filing Agent:
Foreigners or Foreign Entities looking to register a sole-proprietor in Singapore must engage the services of a registered filing agent such as a law firm, accounting firm or corporate secretarial firm to submit the application on their behalf. This is due to the fact that foreigners and foreign entities do not own a Singpass account and the application can only be done by individuals with a Singpass or Corppass account.
Read More: W.L.P LLP Registration Service
All business entities in Singapore are required to have a registered business address. It must be a physical address in Singapore and do note that a P.O. Box address is not allowed to be used as the registered business address.
Singapore Standard Industrial Classification (SSIC Code):
The Singapore Standard Industrial Classification (SSIC) is the national standard taken by Singapore for classification of economic activities undertaken by Singapore Registered Business Entities. In brief, the SSIC code describes the nature of your business activities. A Singapore Registered Entitiy must have at least one SSIC code and a maximum of 2 SSIC codes that best match the nature of their business.
Tools: SSIC Code Search (ACRA)
This Agreement serve to indicate the rights and responsibilities of each individual Partner including but not limited to the percentage of profit they holds and the paid up capital.
Why Register a Limited Liability Partnership in Singapore – The Advantages
- Compliance requirements are simpler compared to a Private Limited Company and resolutions are not required for changes in business details hence there is lesser administrative paperwork in comparison to a Private Limited Company.
- Profits after deducting all operating expenses belong to the partners of the Partnership based on the percentage agreed by all partners in the Partnership Agreement.
- Partners will not be held personally liable for debts and losses incurred due to the wrongful acts of other partner in the LLP
- No need for computation of corporate taxes as the profits of a LLP is taxed at a personal income tax level or each partner.
- Partner(s) are responsible for all debts and losses incurred by the business, which meant that he/she can be sued it his/her own name if it is a result from their own negligence or misconduct. Hence, personal assets will be affected during the course of business in such case.
- LLP is excluded from tax exemptions and corporate tax rebates which is only applicable to other type of business entities.
- Require to be renewed on a yearly basis.