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Understanding Business Entity: Partnership

Updated: Jun 17, 2023


Partnership


Definition: An arrangement where two or more individuals join together to conduct business with the intention of making profits.


Ownership:

  • Generally consists of 2 to 20 partners.

  • If there are more than 20 partners, they must incorporate a company under the Companies Act, Cap. 50, unless it is a professional partnership.

Legal status:

  • Not considered a separate legal entity.

  • Partners have unlimited liability.

  • Can sue or be sued in the name of the partnership.

  • Cannot hold property in the name of the partnership.

  • Partners are personally responsible for the debts and losses incurred by the partnership, including those caused by other partners.

Registration requirements:

  • Minimum age: 18 years or above [Singaporean / Singapore Permanent Resident]. (Note: At least one partner must be a Singapore resident.)

  • If the partners are not residents of Singapore, a local authorized representative who is ordinarily resident in Singapore must be appointed.

  • Self-employed individuals must contribute to their Medisave account with the CPF Board before registering or renewing the business.

  • Undischarged bankrupts require court or Official Assignee's approval to manage a business.

Formalities & expenses:

  • Quick and straightforward setup process.

  • Easy administration and management.

  • Minimal registration costs.

  • Fewer compliance requirements.

  • Registration must be renewed annually or every three years.

Set up fees:

  • SGD 15 for name registration.

  • SGD 100 for a one-year registration.

  • SGD 160 for a three-year registration.

Taxes:

  • Profits are taxed at the partners' personal income tax rates.

Continuity in law:

  • Continuity depends on the terms outlined in the partnership agreement.

Closing of entities:

  • Partnership can be terminated by the partners through the cessation of business or dissolution of the partnership.

  • Non-renewal of registration upon expiration.

  • The Registrar can cancel the registration if it is not renewed or if the Registrar determines that the business is defunct.

Interested to form a partnership business in Singapore? Averie can help! Contact us now for an absolutely free consultation.



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