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Understanding business entity: Limited Liability Partnership (LLP)

Updated: Jun 17, 2023

Limited Liability Partnership

Definition: Limited Liability Partnership (LLP) is an association of individuals with limited liability for each partner. Its business structure combines the features of a partnership and a limited liability company. It provides the partners with limited liability protection, meaning their personal assets are not at risk for the debts and liabilities of the LLP.

Ownership: At least 2 partners with no maximum limit.

Legal status:

  • LLP is a separate legal entity from its partners.

  • Partners have limited liability.

  • The LLP can sue and be sued in its own name.

  • The LLP can own property in its name.

  • Partners are personally liable for their own actions and wrongdoing.

  • Partners are not personally liable for the LLP's debts and losses incurred by other partners.

Registration requirements:

  • Individual partners must be at least 18 years old.

  • Body corporate (company or LLP) is allowed as partners.

  • At least one local manager, who is ordinarily resident in Singapore and at least 18 years old, must be appointed.

  • Undischarged bankrupts require court or Official Assignee's approval to manage the LLP.

Formalities & expenses:

  • Quick and easy setup process.

  • Less formalities, procedures, and regulatory duties compared to a company.

  • Minimal registration cost.

  • No statutory requirements for general meetings, directors, secretary, annual general meeting, allotment of shares, etc.

  • Annual solvency declaration must be lodged with ACRA (to state whether the LLP can pay its debts).

  • One-time registration process.

Set up fees:

  • SGD15 for name reservation.

  • SGD100 for one-time registration.

Taxes: Profits taxed at partners' personal income tax rates (for individuals) or corporate tax rates (for corporations).

Continuity in law: Perpetual succession until winding up or struck off.

Closing of entities:

  • Winding up can be done voluntarily by members or creditors or compulsorily by the High Court.

  • Striking off the LLP's registration.

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