LP was introduced on 4 May 2009. It does not have a separate legal entity, and provides limited personal liability for partners who do not manage the LP. All LPs must be registered with the Accounting and Corporate Regulatory Authority (ACRA).
Characteristics
Who Can Register?
Set Up Costs
Advantages
Disadvantages
Registering Your LP
Characteristics
- The partners can be individuals, Singapore-registered companies or unregistered foreign companies.
- There must be a minimum of 2 partners, with at least 1 general partner and at least 1 limited partner. There is no maximum number of partners in a LP.
- A general partner has unlimited personal liability and can be appointed as the manager of the LP. The general partner is responsible and liable for all actions, debts and obligations of the LP.
- A limited partner is not liable for any debts and obligations beyond his agreed investment in the LP. If a limited partner takes part in the management of the LP, he will have unlimited liability as if he were a general partner.
- A LP does not have a separate legal entity (i.e. it cannot sue or be sued in its own name and cannot own or hold any property).
- The LP can only be created by registration of a new LP. A company, business or Limited Liability Partnership (LLP) cannot convert to become a LP.
- For tax purposes, each partner will be taxed on his or its share of the income from the LP. Where the partner is an individual, his income from the LP will be taxed at personal income tax rate. Where the partner is a company, its income from the LP will be taxed at corporate tax rate.
back to top
Who Can Register?
- Almost anyone or any company can be an owner in a LP.
- There are some exceptions, for instance, undischarged bankrupts and persons convicted of dishonesty may not be allowed to register and/or be appointed as the manager of the LP. If in doubt, please consult a lawyer.
Appointment Of a Local Manager
- It is compulsory for all LPs to appoint a local manager if all general partners do not ordinarily reside in Singapore. There can be more than one local manager.
- A person is not "ordinarily resident" if he/she:
- does not have a local address and
- cannot legally remain in Singapore for a long period of time
- The local manager must be above 18 years old and be one of the following:
- a Singapore Citizen
- a Singapore Permanent Resident
- a Dependant Pass holder
back to top
Set Up Costs
- Fees for approval of LP name: S$15 per name.
- Registration fees: S$50
- Yearly renewal fees: S$20
back to top
Advantages
- More attractive to investors
A LP may help potential entrepreneurs attract foreign investments from private equity and investment funds businesses who do not wish to take active roles in the management of the LP. Investors may be more willing to join as silent partners as liability for non-general partners is limited.
- Limited liability for limited partners
Only the general partner bears unlimited personal liability for the debts and obligations of the LP. The limited partner enjoys limited liability and will not be accountable beyond his agreed contribution in the LP.
- Easy to administrate
Like partnerships, there is no need to audit or file annual returns with ACRA. However, the LP must keep accounting and other records to explain its transactions and financial position for at least 5 years. ACRA may require the LP to produce these records for inspection.
back to top
Disadvantages
- If a LP does not have any limited partners, the LP registration will be suspended and the general partners will become registered under the Business Registration Act, instead. When a new limited partner registers, the LP registration will be restored and the registration under the Business Registration Act will cease.
- LP is a new business structure and many of the legal and tax issues have not yet been fully resolved.
back to top
Registering Your LP
All LPs must be registered with ACRA.
For More Information
back to top
