Limited Partnership

Limited Partnership (LP) is a business entity formed by at least 2 partners, and it has almost the same characteristics as a General Partnership. The only difference is – there must be at least:

1. 1 general partner, whose personal liability is unlimited; and
2. 1 limited partner, whose personal liability is limited to his / her / its agreed contribution.

Features of Limited Partnership

1. There is no limitation on the number of partners.
2. An individual or a company can be a partner of the LP.
3. It is not a separate legal entity, therefore:
   • The general partner is personally liable for all debts and liabilities incurred by the business;
   • However, the limited partner will not be personally liable for any debts and liabilities incurred beyond his / her / its agreed contribution, provided he / she / it does not take part in the management of the LP.
4. 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.
5. It has to be registered with the Accounting and Corporate Regulatory Authority (ACRA) and renew its licence annually.
6. It is required to keep its accounting records which can support its transactions and financial position.

Requirements of setting-up a Limited Partnership

1. The individual partner must be at least 18 years of age.
2. A LP 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.
3. If the partner is a foreigner or a foreign company, a local resident manager has to be appointed for discharging all obligations of the LP.

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