Understanding
Limited Liability Partnerships (LLPs) in Singapore

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If you’re looking for a business structure that combines the flexibility of a partnership with the benefits of limited liability, a Limited Liability Partnerships in Singapore could be your ideal choice. In this comprehensive guide, we’ll provide you with a thorough understanding of LLPs, covering ownership, legal status, registration, taxation, and more.

Ownership:

An LLP is designed to offer flexibility in terms of ownership:

  • An LLP must have at least two partners, with no maximum limit on the number of partners.

Legal Status:

Limited Liability Partnerships possess distinct legal characteristics:

  • An LLP is a separate legal entity from its partners, providing legal separation between the partnership and individual partners.
  • Partners in an LLP enjoy limited liability, meaning their personal assets are protected from business debts and losses.
  • An LLP can initiate legal actions or be subject to legal actions in the name of the LLP.
  • Unlike some other business structures, LLPs can own property in the name of the partnership.
  • Partners are personally liable for debts and losses resulting from their own wrongful actions but are not personally liable for debts and losses incurred by other partners.

Yearly Statutory Obligations:

Operating an Limited Liability Partnerships (LLPs) in Singapore involves specific annual obligations:
  • An annual declaration of solvency/insolvency must be lodged by one of the managers, indicating whether the LLP can or cannot pay its debts during the normal course of business.
  • Unlike certain business structures, LLPs are not bound by statutory requirements for general meetings, directors, company secretaries, share allotments, etc.

Registration Requirements:

To establish an LLP in Singapore, certain registration criteria must be met:

  • An LLP must have at least two partners, who can be individuals (aged at least 18 years) or body corporates (companies or Limited Liability Partnerships).
  • At least one manager, who is ordinarily resident in Singapore and at least 18 years old, must be appointed.
  • Undischarged bankrupts may need approval from the Court or the official assignee to manage an LLP.

Taxes

Taxation for an Limited Liability Partnerships (LLPs) in Singapore follows specific rules:
  • Profits are taxed at the partners’ personal income tax rates if the partners are individuals.
  • If the partners are corporate entities, profits are taxed at the corporate tax rate.

Continuity in Law:

An LLP enjoys perpetual succession until it is wound up or struck off, providing continuity in its legal existence.

Closing the Business:

Closing an LLP can be done through two main avenues:

  • Winding up can be voluntary, initiated by members or creditors, or compulsory, ordered by the High Court.
  • Striking off is another option for closing an LLP.

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