Forming a Limited Liability Partnership in Singapore has its own rules and regulations. The bureaucracies put in place enables partners to operate well and achieve the company’s goals and targets.
Prior to entering into a partnership, potential business partners need to understand what they're getting into. They have to understand that a partnership suits select industries better than others, industries like professional services, management consultants, accountants, architects, and lawyers.
A limited liability partnership agreement is a legal personality separate from the owners of the firm or company, which is set to protect LLP partners from financial responsibilities in case of misconduct, wrongful act, or gross negligence of one or more partners. The partnership entity is considered a separate legal personality from its owners.
Features of a Limited Liability Partnership Singapore
A Limited Liability Partnership (LLP) has a number of unique features according to the Limited Liability Partnership Act overseen by the Accounting and Corporate Regulatory Authority (ARCA). These features distinguish limited liability partnerships from other types of business. The features are as follows:
- Partners always have a limited liability partnership agreement, which entails that the company is seen as a body corporate, keeping the business, including business debts incurred, a separate legal entity from existing partners.
- Partners have an option to own property.
- Partners can not only be individuals but also bodies corporate, as noted by the Accounting and Corporate Regulatory Authority. This is in line with the separate legal identity of limited liability partnerships.
- An LLP can either sue or sued in its name distinct from business owners and partners. The LLP may also conduct formal business agreements separate from its partners.
- Separate legal identity - The LLP facilitates its own business structure, operations, income tax formal business agreements, financial statements, and more without bearing the name of its partners.
- A partnership should have two or more partners who are protected under the limited liability partnership act, which states that partners are distinct from limited liability partnerships regardless of financial position, or position in the company business structure.
Formation of a Limited Liability Partnership in Singapore
Partners are regarded as equal owners in any partnership. They are required to participate in all activities of the organization. A partnership typically requires at least two or more partners to operate. There is no maximum number of partners to be brought on board.
One of the most important activities in the formation of a partnership is registration. This is a process that has significant rules which one is expected to follow. Limited Liability Partnership Registration in Singapore requires one to have the following documents:
- Registered addresses, jurisdiction, registration number and other registration details of any company that will act as a Limited Liability Partnership Partner.
- Registered address belonging to the Limited Liability Partnership’s Office.
- Consent to Act as Manager alongside Statement of Non-Disqualification to Act as Manager.
- Compliance declaration
- Partners/Managers residential addresses in Singapore.
- Partners/Managers details.
- The Limited Liability Partnership’s Proposed name.
Any group of individuals or companies that want to conduct a limited liability partnership registration in Singapore needs to produce the above documents. This is a rule that needs to be adhered to by everyone. Failure to do so, the LLP registration process will be suspended.
The Process of Registering a Limited Liability Partnership in Singapore
Foreigners who want to start a limited liability partnership in Singapore are needed to hire the services of a corporate service provider. The professional brought on board should be able to offer better company incorporation services.
First things first, the proposed name of the partnership company needs to be approved. The approval takes close to 15 minutes, on payment of the quoted registration fee. The registration procedure takes a short while. In fact, the Limited liability partnership registration in Singapore can take as little as one day.
Advantages of a limited liability partnership
The limited liability Partnership comes with a number of advantages. Those advantages are the ones that have attracted a number of professionals into forming partnerships. They include:
- A separate legal entity, this means the partnership entity is separate from all its partners.
- It has simple compliance requirements unlike private limited companies.
- There is no need to file annual results. Online income tax returns can be filed, and there are no corporate tax benefits for LLP.
- Partners are not liable to losses and debts that are incurred by the other partners.
- Comes with perpetual succession.
Disadvantages of a limited liability partnership
Below are some of the advantages that are present in a limited liability partnership:
- Issues with transferring ownership. This is a process that tends to take a long time hence becoming tiresome.
- No tax exemptions or incentives.
- Partners are liable to their own losses and debts. They have to deal with them on their own.
Starting a Limited Liability Partnership is not a walk in the park. You need to have on board professionals who have a common goal like yours. This is one of the ways that you will enable you to work in harmony with each other. Then, there is the limited liability registration process that should be undertaken with a lot of discretion.
First, the soon to be partners are required to present the needed documents. The documents consist of details that will confirm the legitimacy of the partnership. The Limited Liability Partnership registration in Singapore is simple, provided you have all the required documents and you have complied with all the regulations.
Building Your LLP
The LLP registration process can be challenging, but WealthBridge can make registration easy through our professional services firm that assists in LLP registration, submission of required documents and compliance requirements, and more!
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