In this guide
- What is a Limited Liability Partnership (LLP)?
- How do I register a Limited Liability Partnership (LLP)?
- General compliance of a Singapore Limited Liability Partnership (LLP)
- Advantages of a Singapore Limited Liability Partnership
- Disadvantages of a Singapore Limited Liability Partnership
- Tax implications for a Singapore Limited Liability Partnership
What is a Limited Liability Partnership (LLP)?
A Limited Liability Partnership (LLP) is a separate legal person that allows two or more partners to run a business together while keeping the flexibility of a partnership.
The LLP can own property, enter into contracts, sue and be sued in its own name. Partners are generally not personally liable for the LLP’s debts merely because they are partners, but a partner can still be personally responsible for losses caused by that partner’s own wrongful act or omission.
An LLP must have at least two partners, and there is no maximum number. Partners can be individuals or corporate entities. The LLP must also have at least one manager who is ordinarily resident in Singapore.
The partners’ commercial relationship is usually set out in an LLP agreement covering matters such as contributions, profit sharing, decision-making and what happens when a partner joins or leaves.
How do I register a Limited Liability Partnership (LLP)?
You need to reserve the LLP name before completing the registration in Bizfile. Prepare the approved name details, registered office address, business activity, particulars of the partners and manager, and the controller information required for the application.
The registration process then adds the partners and manager, captures the LLP and controller details, completes the required endorsements and submits the application with the filing fee. ACRA’s current LLP registration guide sets out the current Bizfile steps.
Foreigners without Singpass must engage a registered corporate service provider to complete the registration. If you would like us to handle the process, see our LLP registration service or contact us and we will be happy to help.
What are the ongoing compliance requirements for an LLP?
An LLP has lighter corporate filing requirements than a private limited company, but it still has ongoing obligations.
- Keep accounting and other records that are sufficient to explain the LLP’s transactions and financial position.
- File an annual declaration with ACRA stating whether the LLP is solvent or insolvent. The first declaration is due within 15 months after registration. After that, a declaration must be filed once every calendar year and not more than 15 months after the previous declaration.
- Keep the LLP’s registered particulars up to date when partners, managers, addresses or other registered information change.
- Use the LLP’s registered name and registration number on invoices and official correspondence where required.
ACRA’s annual declaration guidance explains the current filing deadlines and requirements.
What are the advantages of an LLP?
- The LLP is a separate legal person, so it can own property and enter into contracts in its own name.
- Partners generally have limited liability for the LLP’s debts and are not automatically responsible for another partner’s wrongful act.
- The LLP has perpetual succession. A change in partners does not by itself end the LLP.
- Its internal arrangements can be more flexible than a company because the partners can set many commercial terms in their LLP agreement.
- ACRA compliance is lighter than for a private limited company because an LLP files annual declarations rather than company annual returns and does not have the same AGM framework.
What are the disadvantages of an LLP?
- An LLP must always have at least two partners.
- Bringing investors in or transferring ownership can be less straightforward than issuing or transferring shares in a company.
- A partner can still be personally liable for losses caused by that partner’s own wrongful act or omission.
- The tax treatment follows partnership rules rather than the corporate income tax regime, so the outcome depends on the partners and their shares of the LLP’s income.
How is an LLP taxed in Singapore?
For income tax purposes, an LLP is treated as a partnership rather than being taxed as a separate entity. The LLP itself is not taxed on its income at entity level. Instead, each partner is taxed on that partner’s share of the LLP’s income.
An individual partner’s share is taxed at the applicable individual income tax rates. A corporate partner’s share is taxed at the applicable corporate income tax rate. IRAS explains the current treatment in its guidance on LLP tax treatment.
