Other useful information on Limited Liability Partnership
Introduced in 2005 by the Singapore government, the LLP business structure is highly suitable for chartered professionals who decided to work together. This model combines a partnership entity that protects co-partners from liabilities that may arise from wilful misconduct or gross negligence of one partner or a group of partners.
While individual partners are liable for their own misconduct or gross negligence, the partner’s liability is not limited if such acts occur under the partner’s supervision or control. Furthermore, the partnership is not relieved from the liability of other partnership obligations.
There are safeguards within the Singapore Limited Liability Partnership Act to minimise abuse and provide protection to all partners such as its legal independence and right perpetual succession. The transfer of partnerships in an LLP does not affect its existence, rights or liabilities.
Features At-a-Glance
- Separate legal entity
- Partners own and run the business without the appointments of directors, shareholders or company secretary
- Partners are not personally liable for losses or debts, or wrongful acts of other partners. However, a partner is personally responsible for claims against his personal wrongful acts or omissions
- Less restrictive Compliance requirements
- Constraints in transfer of ownership
- Profits taxed at partners’ personal income tax rates if individual, or at the corporate tax rate if partner is a corporation
- A minimum requirement of 2 partners. However, there is no limit to the maximum number of partners appointed
- Partners can be individuals or companies
- All existing partners must agree unanimously to the appointment of a new partner
- All other matters must be decided by majority vote, with each partner having one vote
- LLPs do not have directors, shareholders or secretaries as their business structure
- All LLPs must appoint one manager an individual who is a Singapore resident or citizen
- All transactions and financial records are to be recorded and substantiated for 7 consecutive years
- LLPs are not required to disclose its capital, nor file or audit its accounts
- An LLP manager must submit to the Registrar an annual declaration of solvency or insolvency. The initial declaration must be lodged within 15 months of its registration
