Limited Liability Partnership Incorporation Package
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
- Separate legal entity
- Partners own and run the business without the appointment of directors, shareholders or company secretary
- Partners are not personally liable for losses or debts, or wrongful acts of other partners.
- Less restrictive Compliance requirements
- Constraints in transfer of ownership
- Profits are taxed at partner’s personal income tax rates if individual otherwise is taxed at the corporate tax rate if the partner is a corporation
- There is a minimum requirement of 2 partners
- 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
- 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
