Limited Liability Partnership (LLP) is a business vehicle formed by at least 2 partners, whereby it can be run as a General Partnership and at the same time projected as a separate legal entity like a Private Limited Company.
Features of Limited Liability Partnership
- There is no limitation on the number of partners.
- An individual, a company or a LLP can be a partner of the LLP.
- It is a separate legal entity, therefore:
- The partner will not be personally liable for all debts and liabilities incurred by the business;
- It can sue or be sued in its name;
- It can acquire and hold property in its name;
- It can have a common seal in its name;
- It may do any other legal activities in its name.
- However, if a partner is found negligent or performing wrongful act, he / she / it can be held personally liable for any loss incurred.
- 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;
- A LLP: income to be taxed at the personal / corporate income tax rate, depending on whether the partner of this LLP is an individual or a company.
- It has perpetual succession notwithstanding any change in the partners.
- It is required to keep its accounting records which can support its transactions and financial position.
- It shall submit its declaration of solvency / insolvency to the Accounting and Corporate Regulatory Authority (ACRA).
Requirements of setting-up a Limited Liability Partnership
- The individual partner must be at least 18 years of age.
- Every LLP must appoint at least one manager who is an ordinarily resident in Singapore.
- A LLP 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.
- Desired name of business entity
- Copies of identification (NRIC and/or Passport) of the business owner (including residential address)
- Brief description of principal activities
- Registered business address
- Business details of corporate shareholders (including registration details)
- Completed application forms
- Application for Entity Name (subject to availability and approval by ACRA required)
- Registration of the business