What are the Types of Partnerships in Singapore?

Setting up a business in Singapore offers entrepreneurs and foreign investors access to one of the most competitive and business-friendly economies in Asia. The Accounting and Corporate Regulatory Authority (ACRA) regulates business entities in Singapore and provides several registration options depending on the structure and intent of the business.
One such structure is a Partnership in Singapore, which allows two or more individuals or companies to carry on business together under a shared name. Partnerships are often chosen by small businesses, professionals, or families who prefer a simple structure without the compliance requirements of a private limited company.
This guide explores the types of partnerships available in Singapore, their features, registration process, compliance requirements, and FAQs for businesses considering this route.

Types of Partnerships in Singapore

Under Singapore law, partnerships fall into three main categories. Choosing the right one depends on liability preferences, business size, and long-term goals.

1. General Partnership (GP)

• Formed when two or more persons (up to 20) carry on business together.
• Governed by the Partnership Act.
• Partners are personally liable for debts and obligations.
• Profits are taxed at the partners’ personal income tax rates.
• Not commonly used today due to unlimited liability exposure.

2. Limited Partnership (LP)

• Consists of at least one general partner and one limited partner.
• General partner has unlimited liability and is responsible for managing the business.
• Limited partner’s liability is restricted to their investment and they cannot participate in management.
• Suitable for investors who want to fund a business but not be directly involved in daily operations.
• Regulated under the Limited Partnerships Act.

3. Limited Liability Partnership (LLP)

• A modern hybrid structure that combines features of partnerships and companies.
• Partners have limited liability and are not personally responsible for each other’s debts or misconduct.
• An LLP is a separate legal entity from its partners, unlike a GP or LP.
• Popular among professionals such as lawyers, architects, accountants, and consultants.
• Regulated under the Limited Liability Partnerships Act.

Key Features of Partnerships in Singapore

• Ownership: Requires at least 2 partners; maximum of 20 (for GP).
• Legal Status: Only LLPs enjoy a separate legal identity.
• Liability: Depends on the type of partnership chosen.
• Taxation: Partnerships are not taxed at the entity level. Profits are distributed and taxed under each partner’s individual or corporate tax obligations.
• Flexibility: Partnerships are relatively easy to set up and dissolve compared to private limited companies.

Registration of a Partnership in Singapore

Partnerships must be registered with ACRA before commencing business.

Requirements for Registration

• Minimum Partners: At least two individuals, companies, or a mix of both.
• Manager: At least one local manager (Singapore Citizen, Permanent Resident, or Employment Pass holder).
• Business Name: Must be approved and reserved with ACRA.
• Registered Address: A local Singapore address is required.
• Documents Needed:
  • Proposed business name.
  • Particulars of all partners/managers.
  • Partnership agreement (recommended but not mandatory for GP/LP, advisable for LLP).

Registration Process

1. Name Application: Submit name for approval on ACRA’s BizFile+ portal.
2. Partnership Application: File incorporation details, including partner particulars and business address.
3. Issuance of Business Profile: ACRA provides a certificate and business profile upon successful registration.
4. Bank Account Opening: Partnerships can open a corporate bank account in Singapore using the ACRA business profile and partnership agreement.

Compliance Obligations

• Annual Renewal: GP and LP registrations must be renewed annually. LLPs do not require renewal.
• Record Keeping: Partnerships must maintain proper accounting records for at least 5 years.
• Tax Filing: Income is declared by each partner in their personal or corporate tax returns. LLPs must also file a declaration of solvency/insolvency annually.
• Licensing: Certain regulated industries may require additional business licenses.

Advantages of a Partnership in Singapore

• Easy and quick registration with ACRA.
• Lower compliance costs compared to private limited companies.
• Flexibility in profit-sharing arrangements.
• LLPs provide limited liability while maintaining partnership flexibility.
• Suitable for small businesses, family-run enterprises, and professional services.

Limitations of a Partnership in Singapore

• General Partners (in GP or LP) face unlimited personal liability.
• Lack of corporate tax incentives that private limited companies enjoy.
• Partnerships are less attractive to investors compared to companies.
• Potential conflicts between partners if no clear partnership agreement is in place.

Transitioning from a Partnership to a Company

Many businesses begin as partnerships but later convert into a Singapore Private Limited Company to enjoy benefits such as:

• Separate legal identity and perpetual succession.
• Lower corporate tax rates and exemptions.
• Greater credibility with banks, clients, and investors.
• Ability to scale and raise capital.
• Conversion can be done by incorporating a new company with ACRA and transferring assets, contracts, and liabilities from the partnership to the company.

Conclusion

A Partnership in Singapore offers a straightforward way to start a business, especially for small enterprises, professionals, or investors testing the market. While it has advantages such as low compliance and flexibility, it also comes with liability risks — particularly in General Partnerships and Limited Partnerships.
Entrepreneurs should carefully evaluate their long-term goals. If scalability, tax incentives, and investor credibility are priorities, transitioning to a Singapore Private Limited Company may be the better option.
With Singapore’s transparent regulatory environment, strong financial infrastructure, and pro-business policies, choosing the right business structure is the first step toward long-term success.