No separate legal entity unlimited personal liability

No separate legal entity
•
Unlimited personal liability for debts of partnership
•
Danger of dissolution by death/bankruptcy/ withdrawal
•
Risk of disharmony

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

3. Limited Liability
Partnership [LLP]
Limited Liability Partnership Act

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

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

•
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

•
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

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

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

•
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)

•
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

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

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

Registration of LP