General Partnership is a business entity formed by at least 2 partners. The partners will be jointly managing the business as well as sharing the risk and reward from the General Partnership.
Features of General Partnership
- It must be formed by at least 2 partners and up to a maximum of 20 partners.
- An individual or a company can be a partner of General Partnership.
- A General Partnership is not a separate legal entity, therefore:
- The partner is personally liable for all debts and liabilities incurred by the business;
- It is not allowed to acquire or hold any property in its name.
- The business income will be taxed at the partner’s level, which is to say, if the partner is:
- An individual: income to be taxed at personal income tax rate;
- A company: income to be taxed at the prevailing corporate income tax rate.
- It has to be registered with the Accounting and Corporate Regulatory Authority (ACRA) and renew its licence annually.
- No statutory obligations such as filing of audited accounts and annual return.
- It can be converted to a Limited Liability Partnership (LLP), provided the existing partners will be the partners of the new LLP.
Requirements of setting-up a General Partnership
- The individual partner must be at least 18 years of age.
- A General Partnership must have a business address in Singapore; while using a residential address as the business address will be subject to Housing and Development Board’s (HDB) approval.
- If the partner is a foreigner or a foreign company, a local resident manager has to be appointed for discharging all obligations of the General Partnership.