Features | | |
Introduction | - A basic & simple form of starting the business vehicle
| - Often used as investment vehicle for large projects requiring substantial source of cash
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Suitability of Business Vehicle | - Suitable for a small scale business with low risks
| - Flexibility for allowing a diversification of a portfolio
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Definition | - A business owned by one person
| - A partnership consisting of two or more persons, with at least one general partner and one limited partner
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Ownership or Owners | | - At least 2 partners; one general partner and one limited partner.
- No maximum limit.
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Legal Identity or Status | - 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
| - 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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Requirements For Registration or Formation or Incorporation | - 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.
| - 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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Easiness of Registration | - 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
| - 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 | - Low set up costs among all business vehicles
| - Low set up costs among all business vehicles
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Renewal Costs | | |
Perception of Business by the Public | - Regarded least trust worthy and credibility
| - Regarded moderate trust worthy and credibility
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Funding Opportunities | - Obtaining loans from banks is only by mortgaging the personal assets.
| - Obtaining loans from banks is only by mortgaging the personal assets of the partners.
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Yearly Statutory Obligations | - Yearly renewals (one year or three years)
- CPF Medisave Top-Up required for Self-employed Persons before they can renew sole-proprietorship
| - Yearly renewals (one year or three years)
- CPF Medisave Top-Up required before they can renew LP
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Taxation | - Profits taxed at owner’ personal income tax rates
| - Profits taxed at partners’ personal income tax rates (if individual) / corporate tax rate (if corporation)
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Taxation Form | | - Form P for Partnership & Form B for respective Partners
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GST Implication | - Based on combined turnover of all of your sole proprietorship firms plus income derived from other trades, professional services or vocation
| - Based on combined turnover of all partnership businesses with the same composition (structure) of partners
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Perpetual Existence in Law | - Existence subject to life of the owner and cessation of the business
| - 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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Transfer of Ownership | - When the owner exits the sole proprietorship will cease
| - Partners or corporate bodies can be changed
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Closing the Business or Deregistration | - By Owner – Cessation of business
- Registrar can cancel registration if not renewed or where Registrar is satisfied business is defunct
| - 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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