What is a Partnership?
In Singapore, a partnership is similar to Sole-Proprietor. It is the simplest form of business entity owned by at least 2 to a maximum of 20 partners who have shared authority and responsibility for all assets and liabilities belonging to the business. There is no legal difference between the partners and the business entity. For example, the partners are personally responsible for the debts incurred in the mean of operating the business. It also cannot own a property in its name.
The process to incorporate a company in Singapore as a Partnership can be done easily for Singaporean or Singapore permanent resident;. However foreigners and overseas companies can only incorporate a company in Singapore as a Partnership with the appointment of a local resident manager or if one of the partners are Singaporean or Singapore Permanent Resident.
Who can Incorporate a Company in Singapore as a Partnership?
- Individuals: a Singapore Citizen, Singapore permanent resident, or an Entrepass Holder who is at least 18 years of age.
- Corporate: a company that has been set up and registered in Singapore.
- Foreigners / foreign entities:
- A local manager who is either a Singapore Citizen orpermanent 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.
Preperation Before Company Registration in Singapore
- Business Name:
Prior to company registration in Singapore, 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 Partnership, 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 company registration in Singapore.
- 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 Partnership 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 Partnership 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.
- Registered Address:
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)
Why Register a Partnership in Singapore – The Advantages
- The process of company registration in Singapore and cessation of business activities for Partnerships are relatively easy and fuss free.
- Transfer of and selling of the Singapore Partnership company can be done easily through a name transfer providing that the new owner/ partner is qualified to own and manage a Sole-Proprietorship/ Partnership.
- Compliance requirements in Singapore are minimal and resolutions are not required for changes in business details hence there is lesser administrative paperwork in comparison to that of a Private Limited Company in Singapore.
- Annual General Meeting and Annual Returns filing are not required at every financial year.
- Accounting matters are simplified (Only 4-line statements are required) for Partnerships with revenue less than S$500,000.
- Profits (after deducting all operating expenses) belong to the partners of the Partnership based on the percentage agreed by all the partners.
- No need for computation of Singapore corporate taxes as the profits of a Partnership is taxed at a personal income tax level or each partner.
Disadvantages of Registering a Partnership in Singapore
- All partners are responsible for all debts and losses incurred by the business, which meant that he/she can be sued it his/her own name. Hence, personal assets will be affected during the course of business.
- Company registration in Singapore of the Partnership has to be renewed, the business registration can be automatically cancelled by the Registrar should the partner(s) failed to renewed the business registration on time.
- Partnership is excluded from tax exemptions and corporate tax rebates which is only applicable to other type of business entities.
WLP group is an established service provider that can help entrepreneurs register a Private Limited Company in Singapore. Many companies choose us for our professional services and comprehensive support. If you an entrepreneur seeking to set up a company in Singapore, contact us today for a Free Singapore Company Registration consultation.