No separate legal entity Unlimited personal liability for debts of partnership

No separate legal entity unlimited personal liability

This preview shows page 15 - 31 out of 79 pages.

No separate legal entity Unlimited personal liability for debts of partnership Danger of dissolution by death/bankruptcy/ withdrawal Risk of disharmony
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Disqualification from Management under the Business Names Registration Act section 34(1) Undischarged bankrupts are disqualified unless they obtain permission from the Court or Official Assignee
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3. Limited Liability Partnership [LLP] Limited Liability Partnership Act
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Limited Liability Partnership (LLP) Policy behind introduction of LLPs 2 or more persons carrying on lawful business with a view to profit may register under the Limited Liability Partnerships Act 2004 (wef 11 April 2005) Partner may be an individual, local company, a foreign company or another LLP Non-application of Partnership Act & partnership law Combines features of Partnership and Companies
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Advantages of LLP Flexibility of operating as general partnership but with limited liability protection to partners Limited liability of partners – not personally liable for debts/obligations of partnership
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Only liable for full amount they have agreed to contribute Liabilities of LLP to be met from property of LLP Separate legal entity eg own property, sue and be sued in LLP’s name Perpetual succession
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Conversion of business from partnership firm to LLP Conversion of private limited company to LLP Less stringent requirements than under Companies Act: file annual declaration of solvency or insolvency with ACRA available to public Available to all kinds of businesses and professions
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Management of LLP Must have at least one manager who — ( a) is a natural person; ( b) has attained the age of 18 years and is otherwise of full legal capacity; and ( c) is ordinarily resident in Singapore
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Management Subject to same disqualifications as Company Director o Undischarged bankrupt cannot be manager without the permission of the court or Official Assignee o Unfit to act if manager of another insolvent LLP o Convicted of fraud or dishonesty punishable with imprisonment of 3 months or more o Disqualified under the Companies Act
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Accounts to be kept and open to inspection by all partners No need to publish/ submit financial statements but only annual declaration of solvency or insolvency (available to public)
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Registrar may ask to inspect LLP accounts Contravention – criminal penalties [fine or imprisonment] LLP taxed as a partnership Dissolved by winding up LLP or striking off for not carrying on business
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4. Limited Partnerships Good for investors who don’t desire to take part in management but wish to leave to others who are confident enough to assume unlimited liability LP attractive to private equity and investment funds businesses LP not separate legal entity
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Limited Partnerships Launched by ACRA on 4 May 2009 Limited Partnerships Act 2008 General partnership law applies to LPs except where inconsistent with LPA 2008
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Registration of LP
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