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.
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.
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:
- 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.
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.
- 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:
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