Limited Liability Partnership
What is a Limited Liability Partnership?
A Singapore Limited Liability Partnership (LLP) is a type of business with minimum of 2 partners and above.
- An LLP is regarded as a formal partnership
Benefits of Registering an LLP in Singapore
- Separate legal entity: since an LLP is regarded as a separate legal entity, partners are not liable for any debts incurred by the company. Their liabilities are only limited to the capital contributed to the company.
- Perpetual succession: a limited liability business entity will continue to exist as long as it is not wound up.This is a huge attraction for investors since the business continuity is not affected in any situation, thus promising a stable and more secure outlook.
Disadvantages of a Singapore LLP
- A Singapore LLP is not considered a business entity. This means its profit is taxed at personal income rate. If a company is a partner, its share of profit is taxable at the tax rate for companies
- An LLP does not command status as a private limited company
- There are constraints in the transfer of ownership
There are less stringent compliance requirements for a Limited Liability Partnership agreement:
- An LLP is not statutorily required to appoint a company secretary
- There are no legal obligations to hold an annual general meeting for a Limited Liability Partnership agreement
- It does not have to fulfill complex filing requirements such as annual accounts and tax returns. An LLP is statutorily obliged to make a declaration about its solvency or insolvency annually
A Singapore Limited Liability Partnership can:
- Acquire and hold property in its name
- Do activities in its name as legally required by bodies corporate