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Limited Partnership

Limited Partnership

The Limited Partnership (‘LP’) was introduced in 2009 and is the most recent business form to be introduced to Singapore. An LP is a business organisation that consists of one or more ‘general partners’ and one or more ‘limited partners’. LPs are in essence Partnerships and are created pursuant to an agreement between the partners (“the LP agreement”). They do not have a legal personality that is separate from their constituent partners. The Partnership Act as well as the general law applicable to Partnership applies to LPs subject to the provisions of the Limited Partnership Act 2008 (cap XX). The matters discussed above in relation to the formation of Partnerships and the relations of partners to each other apply to LPs.

Formation of Limited Partnerships

LPs are formed in the same way as Partnership

Termination of Limited Partnerships

The termination of LPs is similar to that for private listed companies. There are, however, some differences which relate to limited partners. For example, limited partners are not entitled to dissolve the LP by notice. Also, an LP is dissolved on the death, dissolution, bankruptcy or liquidation of a limited partner.

In the event of the termination of an LP, its affairs are to be wound up by the general partners unless there is a court order to the contrary.

Registration and Compliance

An LP may be registered under the Limited Partnership Act where it has limited partners that are registered as such under the Act. An LP is deemed to be a general practitioner unless one or more persons are registered as limited partners of the firm in accordance with the Act.

A Partnership can also be converted into an LP where one or more (but not all) of its partners register themselves as limited partners. The resulting LP formed must also register itself as an LP under the Limited Partnership Act. Where a person deals with a firm after it becomes an LP, that person is entitled to treat the firm as a general partnership until he has notice of the registration of that firm as an LP. He is also entitled to treat any person who was a partner of the firm as a general partner of the LP until he has notice of the registration of that person as a limited partner.

The registration of the LP is done through the lodging of prescribed documents by one of its general partners. Thereafter, the LP must comply with all the requirements set out under the Act such as the filing of changes in particulars of the LP, publication of its name and registration number on invoices and official documents and the keeping of proper accounts.

LPs registered under the Limited Partnership Act are not subject to the provisions of the Business Registration Act. Where the LP ceases to have any person named as its limited partner, its registration under the Limited Partnership Act will be suspended. Under such circumstances, the provisions of the Business Registration Act will apply to the LP.

Where every general partner of an LP is ordinarily resident outside Singapore, the Registrar may require a local manager to be appointed to be responsible for the discharge of all obligations attaching to the LP as prescribed by the Limited Partnership Act.

What is the Tax Rates?

For income tax purposes, an LP will be treated as a partnership and not as a separate legal entity. This means that an LP will not be liable to tax at the entity level. Instead, each partner will be taxed on his or its share of the income from the LP. See Partnerships for details. Limited Partners

The key difference between LPs and Partnerships lies in the fact that LPs have ‘limited partners’. A limited partner is defined as any partner who, under the terms of the partnership agreement, shall not be liable for the debts or obligations of the firm beyond the amount of his agreed contribution. The limited partner is thus said to enjoy ‘limited liability’ status. Anyone who is not a limited partner of an LP is a general partner. General partners are regarded in exactly the same manner as partners in a Partnership and are liable for all the debts and obligations of the LP incurred while they are general partners.

Parties who wish to be limited partners in an LP have to register themselves as such under the Limited Partnership Act. Failing to do so will result in the limited partners being treated as if they were general partners of the LP thereby losing their limited liability status. Also, where a person deals with an LP after a partner becomes a limited partner, that person is entitled to treat that partner as a general partner of the LP until he has notice of the registration of that partner as a limited partner.

Limited partners should not take part in the management of the LP and should not have the power to bind the LP. Limited partners who take part in the management of the LP are liable for all debts and obligations of the limited partnership incurred while they so take part in the management as though they were general partners.

Subject to the LP agreement, limited partners may increase, reduce or draw out their contributions with the approval of the general partners.

Any distribution of capital or profits to the limited partners must be refunded if the following conditions are present:

  • Every general partner of the LP was insolvent at the time of the distribution or became insolvent as a result of the distribution;
  • the limited partner knew or ought to have known at the time of the distribution that every general partner was insolvent or would become insolvent as a result of the distribution; and
  • every general partner is adjudicated bankrupt or is ordered to be wound up within one year after the date of the distribution.

Singapore dormant company need to submit audited accounts?

Singapore dormant  company need not submit audited accounts, if your company does not have any accounting transactions for that financial year other than the exceptions set out in section 205B(3) of the Companies Act, eg. maintenance of registered office. If you are not sure whether there was any accounting transaction for your company, please seek professional advice from your Paul Hype Page & Co, ACRA  Certified Public Accounting Firm.

What are the criteria for being appointed as a manager?

At least one manager must be ordinarily resident in Singapore. All managers appointed must be natural persons and above the age of 18. The manager of the LLP must not be:

  1. an undischarged bankrupt (unless he has obtained Leave of the High Court or the written permission of the Official Assignee);
  2. disqualified as an unfit manager of insolvent LLPs under section 34 of the LLP Act;
  3. disqualified as a manager of a former LLP wound up on grounds of national security or interest and disqualified to act as a manager;
  4. disqualified as a person who was convicted of offences involving fraud or dishonesty, or other offences connected with formation or management of a LLP;
  5. disqualified under Sections 149, 149A or 154 of the Companies Act.

Are the duties of a nominee manager the same as a manager?

There is no such position as a “nominee manager” in an LLP. Anyone who is named as the manager will have to perform the duties and carry out the obligations of a manager as set out in the LLP Act.

Ready to incorporate with professional help?

Contact Paul and Hype Page Co. today.

We provide the following services:

  1. Instant online company registration in Singapore
  2. International tax planning and advice
  3. Professional company secretary service at affordable price

*For more details on filing Company’s annual returns, click here

Paul Hype Page & Co. is an ACRA-certified business adviser. Our team of seasoned professional can help you set up a company in Singapore very quickly and easily following all legal entities, and offer you sound advice on how to make it successful too.

In addition to business registration, we’ll also guide you how to:

  1. Write a business plan – Learn how to write a compelling business plan by accessing our sample business plans, or other helpful market research information
  2. Perform market research – Understand your business market, learn how it can enhance your business growth, and how to properly conduct a market research for your business
  3. Corporate Secretary Services – If you are registering a company in Singapore, you will need a Corporate Secretary. Corporate compliance in Singapore is a complex legal requirement for all Singapore registered companies. Our company secretarial team helps our clients and their officers to fulfil their statutory obligations in an efficient manner.
  4. Manage your finances – We’ll offer you the best resources and information to help you fully understand all financial concepts and teach you how to perform basic accounting tasks like budgeting, bookkeeping, financial analysis, among others

To further aid you, we have provided here a resource area with industry specific information and other industry resources to help you successfully start and run your business.

  1. Singapore Business Opportunities 
  2. Singapore Business Licences
  3. Singapore Tax Planning
  4. Singapore Company Incorporation
  5. Singapore Company Yearly Statutory Requirements
  6. Singapore Working Visa Guide

By Eric Eio
Managing Partner of Paul Hype Page & Co.

Eric was awarded an ACCA graduate in 2000 and also graduated from University of Sydney with a Bachelor degree in Computer Science & Accounting. Since graduation, he had worked in Big 4 as an auditor , including a one year overseas stint with Ernst & Young, Shanghai in 2005. He left his last appointment as an Audit Managerial position with PricewaterhouseCoopers, Singapore in 2008 before setting up his own Certified Public Accountant Practice – Paul Hype Page & Co. His firm is being selected to be one of the advisory panel for Singapore top 500 SME.