LLP Registration Singapore: How Suitable It is for Entrepreneur?
It makes sense that new entrepreneurs often get confused over the decision of choosing entity types between LLP or LLC (company). Out of all business structures, these two are the most popular business entities in Singapore with advantages that include limited liability, tax management, scalability, and management control. While LLP & LLC share some similar features, a few stark differences also exist in certain aspects. The limited liability partnership registration Singapore is suitable for those entrepreneurs who want to venture into a partnership business while enjoying the benefits of the private limited company.
What is Limited Liability Partnership Singapore?
A Limited Liability Partnership is relatively a new business form that perfectly blends the features of both partnership and LLC (company). It has been designed to support the professionals who have the urge to become an entrepreneur. It is best suitable for a chartered professional such as an accountant, lawyer to incorporate LLP in Singapore.
Key Features of Singapore Limited Liability Partnership (LLP)
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It has a separate legal identity, independent from its partners. It can hold property and sue or be sued in its own name.
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An LLP has perpetual succession.
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There must be at least two partners, but there is no maximum limit.
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The partners of the LLP have limited liability and are not personally held liable for any loss or debt of business incurred by other partners.
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A partner is personally responsible for liabilities that arise due to his wrongful act of negligence, omission, or commission.
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The Limited Liability Partnership agreement signed by the partners regulates the mutual rights and duties of the LLP and its partners.
Procedure of LLP Registration Singapore
A Limited Liability Partnership Singapore must be registered with ACRA (Accounting & Corporate Regulatory Authority). Just like company registration Singapore, the process consists of two steps: 1) LLP name reservation; and 2) LLP registration.
A Few Requirements for LLP Registration:
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There must be one individual partner who is ordinarily resident in Singapore.
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The entity name must include the words 'Limited Liability Partnership' of the acronym 'LLP.'
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Each LLP must have a registered office address in Singapore.
Documents Required
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Particulars of partners/managers
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Documents for residential address proof of the partners /managers of LLP
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Details of the registered office address
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Declaration of compliance
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If a partner is an entity: details of the company such as company registration number, registered address, particulars of officers, Memorandum & Article of Associations, etc.
Upon successful submission of the registration application, you will be notified by the authority about the confirmed registration of Singapore LLP through an email. You will receive the registration certificate and business profile of the LLP in soft-copy format. These documents are treated as official certificates, and thus, hard-copies of the same are not necessarily needed. However, one may file an application to get the hard copies.
Tax Liabilities of LLP Singapore:
Unlike companies, the LLPs are not taxed at the corporate level. Each of the partners is taxed individually based on their profit and status (individual or corporate entity). While an individual partner will be taxed on the share of his profit from the LLP, based on his personal income tax rate, a partner who is company will be taxed at its share of profit from the LLP based on the applicable corporate income tax rate.
Compliance Requirements of Singapore LLP:
The annual compliance requirements of Singapore LLP are the way least complex and intricate than an LLC (company).
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Keeping the books of account updated is necessary for the LLP in Singapore. It is mandatory to maintain accounting and other financial records for seven consecutive years.
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Filing of annual accounts or get them audited is not required.
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Disclosure of capital amount is not needed in LLP.
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An annual disclosure of solvency or insolvency must be made by the manager of an LLP to the registrar (ACRA). It must be done within first 15 months of LLP registration. Subsequently, the gap between two such annual declarations should not be more than 15 months.
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All official documents/ correspondence of an LLP must print the registration number, and it must bear the statement that the entity is being registered as LLP.
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Any amendment made to LLP's particulars must be informed to the registrar within 14 days from the effective date of the change.
Benefits of Running an LLP in Singapore:
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The Company registration process is quick and easy to set up.
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Very few statutory obligations to comply with when compare to an LLC (company).
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Registration cost is low, and requirements are less than a company.
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Convening Annual General Meeting, the Board meeting is not required.
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One time registration is sufficient for business operation.
If you have a compatible partner with whom you share same profession and business goal, then LLP would be the ideal business vehicle for you to use. Before tying the business relationship with the partner, ensure that you both have
