A partnership is a business firm owned by more than one individual or company. In Singapore, partnerships cannot have more than 20 owners. All partnerships must be registered with the Accounting & Corporate Regulatory Authority (ACRA).
Characteristics
Who Can Register?
Set Up Costs
Advantages
Disadvantages
Registering Your Partnership
Characteristics
- Owners can be individuals or companies.
- There must a minimum of 2 owners and a maximum of 20.
- A partnership is not a legal entity (i.e. it cannot sue or be sued in its own name and it cannot own or hold any property).
- Profits form part of each partner’s personal income and are taxed at personal income tax rates.
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Who Can Register?
- Almost anyone or any company can be an owner in a partnership.
- There are some exceptions, for instance, undischarged bankrupts may not be allowed to register such entities in Singapore. If in doubt, please consult a lawyer.
Appointment Of Local Manager
- Like sole-proprietorships, the owners of a partnership must appoint a local manager if none of the partners is "ordinarily resident".
- 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 21 years old and be one of the following:
- a Singapore Citizen
- a Singapore Permanent Resident
- an Employment Pass holder
- an Approval-in-Principal Employment Pass holder
- a Dependant Pass holder
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Set Up Costs
- Fees for approval of business name: S$15 per name.
- Registration fees: S$50
- Yearly renewal fees: S$20
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Advantages
- Quick and easy Set Up
Other than registering with ACRA, there are no other formalities required. However, it is advisable to draw up a Partnership Agreement with the help of a lawyer. The contract helps to define the role, responsibilities and profits due to each partner.
- Easy to administrate
Partnerships do not need to audit their accounts or file annual returns with ACRA.
- More resources and sources of funds
Partners bring resources, experience and funds to the table. Banks and other lending institutions may also be more willing to lend based on the combined assets of all the partners.
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Disadvantages
- All partners bear the costs and risks. As each partner has the implied power to act on behalf of the partnership, a partner can be made accountable for the loss caused by another partner.
- Partnerships are automatically dissolved when a partner exits or dies. The remaining partners will have to form a new partnership.
- Like sole-proprietorships, partners are personally accountable for business debts and losses. The partners may be require