Previously, we have talked about setting up a Limited Liability Partnership (LLP) in Singapore. This is one of the business structures available in Singapore. Apart from this, another business structure we are going to talk about in detail today is Limited Partnership (LP).
A Limited Partnership is made up of one general partner and one limited partner. There is no limit on the number of partners it can have but at all times, there must be one general partner and one limited partner.
The general partner can be an individual or a company. The limited partner can be an individual, a company or an unregistered foreign company. The general partner is involved in the company management of day to day business but the limited partner is a “sleeping partner” who cannot be involved at all in the management.
An LP is not a separate legal entity from the partners, meaning that the Limited Partnership cannot own property in its name and the partners can be held liable for its actions. The liability of the limited partners is only up to the amount specified in the partnership agreement but for the general partners, the liability is unlimited.
An LP must appoint a local manager (at least 18 years of age) if all the general partners are not residents in Singapore. The local manager is personally responsible for discharging all obligations of the LP – being subject to the same responsibilities, liabilities and penalties as a general partner of the LP if the general partner defaults in his obligations. The manager of an LP must not be an undischarged bankrupt unless he has obtained permission from the High Court or of the Official Assignee.
Without further delay, let’s move on to registering for the Limited Partnership!
1. Document Requirements
To register a partnership with the Accounting And Corporate Regulatory Authority of Singapore (ACRA), the following documents need to be prepared and available when it comes to submission. They are:
- The name approved for the Limited Partnership
- Residential address of the partners and managers involved
- Identification documents of the partners and managers involved
- A local office address for the Limited Partnership
- The consent from the person appointed to act as Manager
- Declaration of Non-Disqualification to Act as Manager
- Registration details of the company which apply to partners that are registered companies
- Declaration of compliance of all partners
2. Registration Process
The registration process can usually be completed within 24 hours, provided that all involved partners and authorized representatives endorse the Limited Partnership’s online application in a timely manner. However, the process may take up to two months in unusual circumstances. This means that the registration application might be referred to other relevant government agencies for review.
All partners will usually be notified via email when the registration application is successful. A registration number will then be issued to the Limited Partnership and partners can obtain soft copies of the business profile online.
The following procedures must be strictly adhered to by all registered Limited Partnerships:
- All communication materials related to the business such as invoices and letterheads must bear the registration number of the Limited Partnership
- Any changes made to the business registration details must be quickly reported to ACRA
- Continuing the Limited Partnership after the lapse of its validity or after the registrar cancels the registration is counted as an offence
- Limited Partnerships are not required to file regular financial statements with ACRA and are also exempt from annual audits
- The Limited Partnerships are required to file personal income returns and must relay their revenue and profits to the Inland Revenue Authority of Singapore (IRAS)
- Accounts and records must be kept for a duration of five years
Now that the picture is clearer on how to set up a Limited Partnership, we hope you will choose the most suitable option for your business structure. Limited Partnerships usually work well for real estate industries, small and medium sized businesses as well as professional services (lawyer) etc. All the best in setting up the LP!