What is a Singapore Limited Liability Partnership?
A Singapore Limited Liability Partnership (LLP) provides entrepreneurs a fuss-free setup as of a partnership with features when going through the process to register a private limited company in Singapore. Partners in the Singapore Limited Liability Partnership can operate their Singapore business as a partnership while having 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 or losses due to his own act of negligence or misconduct, liability claims can be made against him or her as an individual, in addition to his or her personal assets. The other partner(s) who are not involved in the act of misconduct will not be liable personally, hence safeguarding his or her personal assets with their liabilities only limited only to the capital contributed by them to the business. A minimum of 2 partners is required for the application to set up a company in Singapore.
For entrepreneurs who have already decided to register for a partnership, the application process is similar to the standard process to incorporate a company in Singapore. WLP Group is a company registration service provider that can help you complete all the steps in Company Registration in Singapore in an efficient and timely manner.
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 companies: a Singapore registered company.
- Foreigners or foreign entities:
- A local manager who is either a Singapore citizen or permanent resident
- At least 21 years of age
- A registered filing agent
- Or a partner who is a Singaporean or Singapore permanent resident.
Documents needed before starting the process to Incorporate a Company in Singapore
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 an LLP in Singapore. The same applies to Foreign Entities. It is important to note that the manager to be appointed must be a 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. WLP is one such professional service provider who can help you successfully complete your Business Registration in Singapore.
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 the 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 Entity 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 serves to indicate the rights and responsibilities of each individual Partner including but not limited to the percentage of profit they hold 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 partners in the LLP
- No need for computation of corporate taxes as the profits of an 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 of their own negligence or misconduct. Hence, personal assets will be affected during the course of business in such a 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.
If you and your partners are ready to start your company formation in Singapore, contact us today for a Free Singapore Company Registration consultation. We will be able to provide you with all the necessary details for a fast and successful Company Registration in Singapore process.