Limited Liability Partnership (LLP)

Limited Liability Partnership (LLP)

Limited Liability Partnership (LLP)

Introduction of a Limited Liability Partnership (LLP)

LLP or Limited Liability Partnership is an ideal collaboration of private limited company and a partnership firm. Since it was introduced, one can register for business entity of this kind and it has been following a worldwide recognition around various developed companies. LLP registration is possible for local companies, Singapore Citizens and Singapore Permanent Residents. Foreign companies and individuals should appoint a local resident manager to register for general partnership firm. With Limited Liability Partnership, the owners can flexibly operate their business as a partnership firm with enjoying the legal recognition as a private limited company. In LLP, there should be at least 2 partners and has no limit for maximum number of partners. Individuals, who are providing their professional services in the country like architects, lawyer, management advisors and accountants etc.

 

Advantages of a Limited Liability Partnership

  • Lower registration cost and easy to set up
  • Reduced compliance obligations – general meetings, directors, company secretary, etc., are not required
  • Only an annual declaration of solvency or insolvency is required
  • LLPs are considered as a separate legal entity from their owners, which means that owners are not responsible for any debts or losses the business incurs
  • Easier than Partnerships and Sole Proprietorships to secure funding for the start-up years of the business
  • Succession of LLPs are perpetual, until they are struck off or wound up

 

Disadvantages of a Limited Liability Partnership

  • Profits are taxed are based on the owner’s income level – this means that as the owner’s income level increases, taxes increase as well due to Singapore’s progressive tax system
  • Not eligible for Government funded micro loans

 

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