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Features
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Introduction
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- One of the most preferred corporate vehicle for wider range of business journey
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- A basic & simple form of starting the business vehicle
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- A basic form of business vehicle with two or more co-partners
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- Often used as investment vehicle for large projects requiring substantial source of cash
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- Hybrid form of business vehicle consisting both company and typical partnership
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Suitability of Business Vehicle
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- Suitable for carrying all types of business activities including professional services
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- Suitable for a small scale business with low risks
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- Suitable for a small to medium size of business journey with co-partners
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- Flexibility for allowing a diversification of a portfolio
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- Suitable to carry professional services such as Law Firm, Audit Firm, etc
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Definition
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- A business form which is a legal entity separate and distinct from its shareholders and directors
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- A business owned by one person
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- An association of two or more persons carrying on business in common with a view to profit
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- A partnership consisting of two or more persons, with at least one general partner and one limited partner
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- A partnership where the individual partner’s own liability is generally limited
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Ownership or Owners
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- Exempt Private Company – 20 members or less and no corporation holds beneficial interest in the company’s shares
- Private Company – 50 members or less
- Public Company – can have more than 50 members
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- Between 2 and 20 partners.
- A partnership of more than 20 partners must incorporate as a company under the Companies Act, Chapter 50 (except for professional partnerships)
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- At least 2 partners; one general partner and one limited partner.
- No maximum limit.
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- At least 2 partners.
- No maximum limit.
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Legal Identity or Status
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- A separate legal entity from its members and directors
- Members have limited liability
- Can sue or be sued in company’s name
- Can own property in company’s name
- Members not personally liable for debts and losses of company
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- Not a separate legal entity
- Owner has unlimited liability
- Can sue or be sued in individual’s own name
- Can also be sued in business name
- Can own property in individual’s name
- Owner personally liable for debts and losses of business
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- Not a separate legal entity
- Partners have unlimited liability
- Can sue or be sued in firm’s name
- Cannot own property in firm’s name
- Partners personally liable for partnership’s debts and losses incurred by other partners
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- Not a separate legal entity
- General partner has unlimited liability
- Limited partner has limited liability
- Can probably sue or be sued in firm’s name
- Cannot own property in firm’s name
- General partner personally liable for debts and losses of the LP
- Limited partner not personally liable for the debts or obligations of LP beyond amount of his agreed contribution
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- A separate legal entity from its partners
- Partners have limited liability
- Can sue or be sued in LLP’s name
- Can own property in LLP’s name
- Partners personally liable for debts and losses resulting from their own wrongful actions
- Partners not personally liable for debts and losses of LLP incurred by other partners
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Requirements For Registration or Formation or Incorporation
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- Minimum of one share.
- Minimum Paid-up capital is S$1 (SGD One Only)
- At least one shareholder.
- At least one director ordinarily resident in Singapore, at least 18 years old.
- If a foreigner wishes to act as a local director of the company, he can apply for an EntrePass from the Ministry of Manpower (MOM).
- Undischarged bankrupts cannot be a director and cannot manage a company without approval from the Court or the Official Assignee.
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- Age 18 years or above. Singapore citizen / Singapore Permanent Resident / EntrePass holder.
- If owner not resident in Singapore, he must appoint an authorized representative who is ordinarily resident in Singapore.
- Self-employed persons must top up their Medisave account with the CPF Board before they register a new business name, become a registrant of an existing business name, or renew their business name registration.
- Undischarged bankrupts cannot manage the business without approval from the Court or the Official Assignee.
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- Age 18 years or above. Singapore citizen / Singapore Permanent Resident / EntrePass holder.
- If owner not resident in Singapore, he must appoint an authorized representative who is ordinarily resident in Singapore.
- Self-employed persons must top up their Medisave account with the CPF Board before they register a new business name, become a registrant of an existing business name, or renew their business name registration.
- Undischarged bankrupts cannot manage the business without approval from the Court or the Official Assignee.
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- At least one general partner and limited partner. Both can be individuals (at least 18 years old) or body corporate (company or LLP).
- If all general partners are ordinarily resident outside Singapore, they must appoint a local manager who is ordinarily resident in Singapore.
- Self-employed persons must top up their Medisave account with the CPF Board before they register as a partner of a new LP, become a registered partner of an existing LP, or renew their LP registration.
- Undischarged bankrupts cannot manage the business without approval from the Court or the Official Assignee.
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- At least two partners, who can be individuals (at least 18 years old) or body corporate (company or LLP).
- At least one manager ordinarily resident in Singapore and at least 18 years old.
- Undischarged bankrupts cannot manage the business without approval from the Court or the Official Assignee.
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Easiness of Registration
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- An easy process to be completed within a few hours however subject to referral to different authorities which may delay up to 14 working days
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- An easy process to be completed within a few hours however subject to referral to different authorities which may delay up to 14 working days
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- An easy process to be completed within a few hours however subject to referral to different authorities which may delay up to 14 working days
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- An easy process to be completed within a few hours however subject to referral to different authorities which may delay up to 14 working days
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- An easy process to be completed within a few hours however subject to referral to different authorities which may delay up to 14 working days
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Level of Fees for Registration
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- High when comparing to other form of business vehicles
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- Low set up costs among all business vehicles
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- Low set up costs among all business vehicles
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- Low set up costs among all business vehicles
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- Low set up costs among all business vehicles
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Renewal Costs
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- Perpetual succession hence renewal is not applicable
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- Perpetual succession hence renewal is not applicable
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Perception of Business by the Public
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- Regarded more trust worthy and credibility
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- Regarded least trust worthy and credibility
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- Regarded least trust worthy and credibility
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- Regarded moderate trust worthy and credibility
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- It is common with specific professions hence it is easily and strongly regarded more trust worthy and credibility
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Funding Opportunities
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- Avenue for equities from members including venture capital funding.
- Obtaining financial loans is relatively easier compared to other form of businesses.
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- Obtaining loans from banks is only by mortgaging the personal assets.
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- Capital injection is limited to the new partner.
- Obtaining loans from banks is only by mortgaging the personal assets of the partners.
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- Obtaining loans from banks is only by mortgaging the personal assets of the partners.
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- Obtaining loans from banks is only by mortgaging the personal assets of the partners.
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Yearly Statutory Obligations
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- Must appoint a company secretary within 6 months of incorporation.
- Must appoint an auditor within 3 months after incorporation, unless the company is exempt from audit requirements.
- Annual returns must be filed.
- Statutory requirements for general meetings, directors, company secretary, share allotments must be complied with.
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- Yearly renewals (one year or three years)
- CPF Medisave Top-Up required for Self-employed Persons before they can renew sole-proprietorship
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- Yearly renewals (one year or three years)
- CPF Medisave Top-Up required for Self-employed Persons before they can renew partnership
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- Yearly renewals (one year or three years)
- CPF Medisave Top-Up required before they can renew LP
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- Annual declaration of solvency / insolvency must be lodged by one of the managers stating whether the LLP is able or not able to pay its debts during the normal course of business.
- No statutory requirement for general meetings, directors, company secretary, share allotments etc.
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Taxation
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- Profits taxed at corporate tax rates
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- Profits taxed at owner’ personal income tax rates
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- Profits taxed at partners’ personal income tax rates
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- Profits taxed at partners’ personal income tax rates (if individual) / corporate tax rate (if corporation)
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- Profits taxed at partners’ personal income tax rates (if individual)/ corporate tax rate (if corporation)
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Taxation Form
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- Form P for Partnership & Form B for respective Partners
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- Form P for Partnership & Form B for respective Partners
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- Form P for Partnership & Form B for respective Partners
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GST Implication
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- GST obligation is at entity level based on own turnover
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- Based on combined turnover of all of your sole proprietorship firms plus income derived from other trades, professional services or vocation
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- Based on combined turnover of all partnership businesses with the same composition (structure) of partners
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- Based on combined turnover of all partnership businesses with the same composition (structure) of partners
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- Based on combined turnover of all partnership businesses with the same composition (structure) of partners
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Perpetual Existence in Law
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- A company has perpetual succession until wound up or struck off.
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- Existence subject to life of the owner and cessation of the business
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- Existence subject to partnership agreement
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- Existence subject to partnership agreement
- If there is no limited partner, the LP registration will be suspended and general partners are deemed registered under the Business Registration Act.
- Once a new limited partner is appointed, the registration of the LP will be restored to “live” and general partners’ registration under the Business Registration Act ceases.
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- The LLP has perpetual succession until wound up or struck off.
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Transfer of Ownership
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- Ownership can be transferred by sale and purchase of shares
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- When the owner exits the sole proprietorship will cease
- Owner can be changed to somebody else
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- Partners or corporate bodies can be changed
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Closing the Business or Deregistration
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- Winding Up – Voluntarily by members or creditors, compulsorily by the High Court.
- Striking off
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- By Owner – Cessation of business,
- Registrar can cancel registration if not renewed or where Registrar is satisfied business is defunct
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- By the partners – Cessation of business.
- Registrar can cancel registration if not renewed or where Registrar is satisfied business is defunct
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- By general partner – Cessation of business or dissolution of LP.
- Registrar can cancel registration if not renewed or where Registrar is satisfied business is defunct
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- Winding Up – Voluntarily by members or creditors, compulsorily by the High Court.
- Striking off
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Comparison Of Business Firms And Entities In Singapore
