If the LLP business structure sounds like it may suit your business needs, read on to find out more about LLP.
A Singapore LLP is regarded in law as a body corporate and has a legal status separate from its partners. As such, an LLP can sue/be sued and acquire a property in its name.
A partner will be held personally liable for his wrongful acts or omission i.e. claims for liabilities can be made against him and his personal assets. In such situations, the LLP is liable to the same extent as the partner. Thus claims can be made against an LLP to the full extent of its assets.
However, a partner cannot be held personally liable for the wrongdoings or omissions of any other partners in the LLP. Their liabilities will be limited only to the capital contributed by them to the LLP
Tax Liability of a Singapore LLP and its Partners
For income tax purposes, the LLP is not treated as a separate legal entity and therefore will not be taxed at the entity level. Instead, the share of profits/income from the LLP will be taxed on each partner at personal income tax rates/ corporate tax rates depending on whether the partner is an individual / a company.
Partners and Managers
A partner is defined as any person who has been admitted as a partner in the LLP in accordance with the LLP agreement.
Every LLP shall have at least two partners.
The partner in an LLP can be an individual, a local company, a foreign company or another LLP.
A manager is defined as any person who is concerned in or takes part in the management of the LLP.
Every LLP must have at least one manager who is an ordinary resident in Singapore, a natural person of full age (i.e. at least 18 years old) and of capacity.
A Singapore LLP must have a local address as a registered office address. P.O. Box address cannot be used as a registered address. The office address can be used on the business cards, letterheads or any other official documents.
The name of a Singapore LLP must include the words “limited liability partnership” or the acronym “LLP”. Every LLP shall ensure that its invoices and official correspondence bear the name of the LLP, Unique Entity Number (UEN) and a statement that it is registered with limited liability.
Compliance and Annual Filing Requirements:
- Proper bookkeeping and accounting should be done in order to support all the transactions and financial position of the LLP. Failure to comply may result in prosecution and penalties. Accounting and other financial records need to be kept for 7 consecutive years.
- A Singapore LLP is not required to file/audit its accounts nor reveal its capital.
- An LLP is required to submit an annual declaration of solvency or insolvency to the Registrar. This must be lodged within the first 15 months from the date of the registration of the LLP. Thereafter a declaration must be submitted in every calendar year at intervals of not more than 15 months.
- The Registrar must be informed of any changes to the particulars of the LLP within 14 days from the date of change.
If you are keen on registering an LLP, you would find the following information useful.
An LLP has to be registered with Accounting and Corporate Regulatory Authority (ACRA) of Singapore. Registration can be done online via Bizfile+ or through engaging the services of professional services firm.
However, for foreigners who wish to set up an LLP, it is compulsory to engage the services of a professional services firm to register an LLP.
The LLP registration process consists of two steps: name reservation and registration of the entity. Typically, an LLP registration can be completed within a day.
Documents required for a Singapore LLP
To register for an LLP in Singapore, you will need to provide the following:
- Proposed name of LLP
- Registered address for the LLP
- Particulars of the partners/managers as per passport/Singapore NRIC
- Residential address of the partners/managers
- Where partner is a company, registration details of the company (e.g. registration number, jurisdiction, registered address etc.)
- Declaration of compliance
- Consent to Act as Manager and Statement of Non Disqualification to Act as Manager
Bank Account Opening for a Singapore LLP
Following the successful registration, LLP can open a corporate account in any bank operating in Singapore, be it local or international. Procedures and requirements will depend on each bank. The banks may require the presence of partner(s) when opening an account.
The banks will usually require the following documents:
- Account Application Form(s) which is available on most banks’ websites
- Partners’ Resolution of bank account and authorized signatories, which is usually prepared by banks and made available for use during bank account opening process
- Certified True Copies of photocopies of NRIC/Passport of all Partners and Authorized Signatories
- A latest print out of the LLP’s business profile
If you require assistance in setting up a limited liability partnership in Singapore, please contact us for a non-obligatory consultation.