Establishing Business and Company in Singapore
Types of Businesses and Companies:
Limited Liability Partnership
There is a new vehicle for doing business in Singapore. Since the introduction of the Limited Liability Act in 11 April 2005, parties now have the option of choosing to register a Limited Liability Partnership to conduct their business activities.
A business firm may convert to a LLP if the partners of the business firm are all going to be the partners of the LLP. Likewise, a company can also convert to a LLP if all the shareholders of the company are going to be the partners of the LLP and the company has not outstanding security interests in its assets at the time of application for conversion.
What is a LLP
A LLP has features of a partnership. Yet, it is a body corporate and has a legal personality separate from that of its partners. A LLP is capable of doing acts and things in its name as bodies corporate normally do, e.g. pursuing legal actions, acquiring property and having a common seal.
While a partner of a LLP may be held personally liable for his own wrongful acts or omissions, he will not be held personally liable for the business debts of the LLP or for wrongful acts or omissions of the other partners of the LLP.
The LLP thus gives owners the flexibility of operating as a partnership as well as the limited liability status of private limited companies.
Some Requirements of a LLP
The manager is 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 full age and capacity and ordinarily resident in Singapore. ACRA will treat persons who can provide a local residential address and prove that he can legally remain in Singapore for a long period as “ordinarily resident”.
Every LLP shall have at least 2 partners (a partner being any person or body corporate who has been admitted as a LLP in accordance with the LLP agreement). The partner in a LLP may be an individual, a local or foreign company or even another LLP.
iii. Change in LLP Particulars
When a LLP effects changes to its particulars, e.g., to its name, registered office address, business activity, manager(s) or partner(s), the LLP must notify the Registrar through BizFile within 14 days of such change.
iv. Medisave Contributions
All self-employed persons who intend to be the partners of a new LLP or become the new partner of an existing LLP or convert from a company or a business into an LLP, are required to top up their Medisave account with the CPF Board before they can proceed to do any of the above.
v. Annual Declaration and Accounts
A LLP is required to maintain and lodge such accounting and other records that will sufficiently provide an accurate view of the financial state of the LLP. These accounts must be kept for 7 years.
The Manager of the LLP also needs to lodge a declaration on the solvency status of the LLP, the first annual declaration to be lodged within 15 months from the date of registration of the LLP. Subsequent declarations must be lodged once in every calendar year and not more than 15 months after the lodgement of the last declaration. This solvency report is made available to the public.
You can contact us to register LLPs or convert companies or business firms to LLPs on your behalf. We also provide professional advice as to the legal effects of conversion, the general tax obligations of LLPs and receivership and winding procedures for LLPs,
The material in this memorandum is of the nature of the general comment only, and neither purports, nor is intended to be advice or any particular matter. Legal advice should be sought from qualified lawyers on any issues and queries relating to the topic.