The limited liability partnership (LLP) is a business entity which exists in Singapore. Incorporation of an LLP will allow its partners to benefit from limited liability which serves as a form of protection for their assets.

Limited Liability Partnership in SG

There are several different business structures which any prospective business owner in Singapore might choose to establish. Each business structure has specific characteristics which benefit the owner of the business. Among these business structures are the partnership, the private limited company, and the sole proprietorship. Another important business structure which exists in Singapore is the limited liability partnership.

 

Definition of a Limited Liability Partnership (LLP)

In Singapore, a limited liability partnership (LLP) is a type of business structure which involves two or more partners in the incorporation of a partnership entity. An LLP protects all of the co-partners involved from liabilities which would otherwise be suffered due to the deliberate misconduct or extreme negligence of one or more partners involved in the LLP. Therefore, the nature of an LLP provides safety for one’s personal assets as they relate to the operations of the business.

 

Circumstances in Which a Singapore Business Owner Should Start an LLP

There are certain situations in which it would be in the best interests of a Singapore business owner to start an LLP. In these situations, it would be more advantageous to start an LLP than it would be to start a business of any other business entity. One such circumstances arises when the owner of the business does not have much in the way of financial resources while also being inexperienced enough that input from a partner is required. The nature of the LLP will ensure that even the low amount which such a business owner uses in order to benefit the company will be protected. Furthermore, by working with one or more partners, the lack of experience in operating a company can be overcome because of the contributions made by the other partners.

Those who work with partners who have reputations which are not exactly ideal will find relief through the nature of an LLP. Such is the case because in a Singapore LLP, each partner is to be held personally accountable for any liabilities caused by the actions of the partner in question. All liability claims are to be made against the partner who is at fault. However, the structure of a Singapore-based LLP creates a situation in which all partners who have been absolved of any wrongdoing will remain unaffected by any liability claim. Such partners’ liabilities are to be restricted to the amount of money which they have contributed to the LLP. Furthermore, any partner of a Singapore LLP who has not done anything wrong is not allowed to be held personally liable for the unethical, immoral, or illegal actions of any errant partners.

Those who have difficulties in deciding upon what rights and duties are to be assigned to each partner will also find that setting up an LLP will be an advantageous decision. This is because all rights and duties of an LLP based in Singapore as well as those of its partners are specified by a pre-determined limited liability partnership agreement. This agreement serves as the primary arbitration regarding such matters within the LLP. However, even LLPs without any limited liability partnership agreement will have these duties and rights assigned in advance. This is because LLPs without a limited liability partnership agreement are governed by the First Schedule of the Limited Liability Partnership Act 2005. This Schedule and Act serve as the primary legislation governing all limited liability partnerships which operate in Singapore today.

Now that you have read all of the preceding information on limited liability partnerships in Singapore, you might have begun to develop an interest in starting one of your own. Should such happen to be true, we at Paul Hype Page & Co will always be willing to help you with the establishment of your own Singapore-based LLP. We will see to it that all the necessary steps which are related to the setup of the LLP are appropriately completed so that you will not face any significant problems related to its operation.