Limited Liability Partnership in Singapore: A complete guide (2024)

In the dynamic business landscape of Singapore, choosing the right legal structure is crucial for success. Many business owners and investors often struggle with deciding between options like sole proprietorships, partnerships, and private limited companies.

For those seeking both flexibility and limited liability, the Limited Liability Partnership (LLP) stands out as an ideal choice. 

In the article, you will learn everything there is about this Singapore Limited Liability Partnership structure:

• What is a limited liability partnership in Singapore?
• Its advantages and disadvantages;
• How to register your limited liability partnership
• And all essential insights regarding this entity.

By the end of this post, you'll have all the knowledge you need to confidently register your limited liability partnership with ACRA. Let's get started!

1. What is a Singapore limited liability partnership?

A Singapore Limited Liability Partnership (LLP) is a business structure that combines the flexibility of a partnership with the limited liability protection of a company. 

An LLP operates as a separate legal entity: It can own assets, sue or be sued, and continue in existence independently of its partners. 

Every LLP  has at least 2 partners.  The partner can be an individual, a local company, a foreign company or another LLP. 

The partners of a Singapore LLP own and run the business. Unlike private limited companies, an LLP does not have directors, shareholders, or secretaries.

This unique combination makes LLPs an appealing choice for entrepreneurs who want the ease of partnership management alongside protection from personal liability

2. Features and advantages of a Singapore limited liability partnership

An LLP in Singapore is recognized as a body corporate under the Limited Liability Partnerships Act 2005. This means that key features of a Singapore LLP include

Limited Liability Protection

The personal assets of partners are generally protected from the LLP’s debts or liabilities. Each partner is responsible only for their actions. Unlike traditional partnerships, partners aren't liable for each other’s mistakes or debts.

Separate legal entity

The LLP can own property, enter into contracts, and conduct business activities under its name.

Taxation

One of the biggest advantages of an LLP in Singapore is its tax treatment. For tax purposes, an LLP is treated as a partnership rather than a separate taxable entity. This means:

• Each partner is taxed individually based on their share of the LLP’s profits;
• If the partner is an individual, their share of income from the LLP is taxed at the individual’s personal income tax rate, from 0% to 24%
• If the partner is a company, the LLP’s income is taxed at the corporate tax rate of 17%
• If a partner is a foreign company or individual, they can earn benefits from the Double Tax Avoidance Agreement between Singapore and their home country.

Perpetual succession

The LLP has perpetual succession, which means any change in the partners of an LLP will not affect its existence, rights, or liabilities.

3. LLP vs Pte.Ltd: What is the difference?

Based on how similar these 2 types of companies are, some entrepreneurs often feel confused not knowing which option is best. 

Let’s look at the comparison table below to see the similarities and differences between a limited liability partnership and a private limited company in Singapore. 

Our table will help you gain clarity as to why some business owners prefer this legal structure over other.

4. How to register a  Limited Liability Partnership in Singapore?

Setting up an LLP in Singapore is straightforward and can be done online through the Accounting and Corporate Regulatory Authority (ACRA) portal.

Please note that if you are a foreign entrepreneur or company, you will need a licensed registered agent in Singapore like Global Link Asia Consulting, or an authorized representative in Singapore to help register your LLP.

Legal Requirements

To be able to register an LLP, you will need:

1. A company name;
2. A registered address in Singapore;
3. A registered agent or an authorized representative (if you are a foreigner);
4. A local manager who can be a Singapore citizen, permanent resident or an employment pass holder of at least 18 years old.

Required documents

To set up a Singapore Limited Liability Partnership (LLP), you will need to submit the following documents:

• Completed LLP Application Form (LLP1).
• Copies of the identification documents (e.g., passports, identity cards) of all partners.
• Proof of address for all partners (e.g., utility bills, bank statements).
• A brief business proposal outlining the nature of the business and the expected activities. 
• Limited liability partnership agreement: This is a mandatory requirement. If there is not the agreement, you can’t run a limited liability partnership. It includes: 
  • How profits are shared among partners.
  • Who needs to agree decisions.
  • Partners’ responsibilities.
  • How partners can join or leave the LLP.

In the absence of an LLP agreement as to any matter, the First Schedule of the LLP Act 2005 will apply.

4.1. Registration process for Singapore Limited Liability Partnership

The registration process for a Singapore Limited Liability Partnership (LLP) is relatively straightforward. Here are the general steps involved:

• 1

  Choose a registered agent

• 2

  Choose a business name 

• 3

  Prepare documents

• 4

  Register with ACRA BizFile

5. What to do after registering a Singapore limited liability partnership?

Once you have successfully registered your Singapore Limited Liability Partnership (LLP), there are several important steps to take to ensure a smooth operation:

1. Open a Corporate bank account:

You should choose a bank that offers suitable services and fees for your business. You can choose a digital bank account or a traditional bank account.

Contact with our bank expert’s Global Link Asia Consulting sowe can give the detail consultation.

2. Obtain necessary licenses and permits:

If your LLP requires any specific licenses or permits to operate, ensure that you obtain them before commencing business activities.

6. Ongoing compliance

LLPs in Singapore have fewer compliance obligations compared to private limited companies, but they still need to meet certain requirements:

File Annual Declarations

Every LLP must file an annual declaration of solvency or insolvency with ACRA within 15 months of registration. Every calendar year thereafter, you must file subsequent declarations not more than 15 months after the last declaration.

File Estimated Chargeable Income (ECI)

Your partnership must file its ECI within 3 months after the end of your financial year (FYE) if you receive a notification to file. After filing your ECI, partners will receive the allocation of estimated profit/loss within 7 days.

File Partnership Income Tax Return

• File your partnership income tax (Form P)

Your partnership must file its income tax return (Form P) between February 1 and April 18 to show all income earned and business expenses deducted by the partnership during the year.

Once form P is processed, your partnership will receive an Allocation off Profits Loss to Partners

If you do not agree with the allocation raised, file an objection within 30 days from the date of your allocation.

• File your personal income tax (Form B/B1)

Each partner is responsible for filing their persona income tax (Form B/B1) between March 1 and April 18. They will receive a Notice of Assessment (NOA) from the end of April. and pay their tax within 1 month of  NOA notification

If any of the partners disagree with the assessment, file an objection within 30 days of the NOA date.

• File your corporate income tax (Form C-S/Form C/Form C-S (Lite))

If any partner is a company, it needs to follow corporate tax filing requirements. 

1. By the 30th of November, they need to file a corporate income tax return with IRAS Form C-S/Form C/Form C-S (Lite)).
2. By the 31st of May of the following year, IRAS will notify the companies of their NOA; they will pay tax within 1 month from the date of the NOA.
3. If any of the corporate partners disagree with the assessment, they can file an objection

7. How to close down your limited liability partnership in Singapore?

Since the limited liability partnership is considered a legal separate entity, the closing process is the same as that of a local company. 

A Singapore LLP can be dissolved through two main methods: striking off or winding up.

1. Striking Off: The LLP can apply to the ACRA to have its name struck off the register. ACRA may approve the request if your LLP meets the criteria for striking off. This is generally a faster and simpler process compared to winding up.

2. Winding Up: Your LLP must appoint an LLP and file the necessary documents under the LLP Act. to pay off all debts

To learn more hour how to close down your LLP in Singapore, read our article : A complete guide on Singapore company closure.

8. Disadvantages of an LLP and why it may not fit your business

While many businesses find the LLP structure advantageous, these are notable drawbacks. You would take into consideration LLP’s downsides below to determine the best structure for your business.

• Conflicts between partners can lead to operational delays or even legal disputes, which can harm the business. Unlike a private limited company (Pte. Ltd), ownership in an LLP is not easily transferable, making it less flexible for growth or exit strategies.
• LLPs are required to file annual declarations and maintain financial records, which can increase administrative costs.
• LLPs CAN not enjoy government incentives available to local companies such as PTE, SUTE program for startups.

Overall, the advantages of a Singapore LLP often outweigh the disadvantages for many businesses. However, it is essential to carefully consider the specific needs and circumstances of your business before making a decision. Consulting with a Singapore corporation professional can help you assess whether an LLP is the right choice for you.

9. How can we help you set up your limited liability partnership in Singapore?

Global Link Asia Consulting - a opening company one-stops service provider support you open a limited liability partnership in Singapore, includes: 

• Choose an appropriate business name for your Singapore limited liability partnership.
• Prepare the necessary documents for registration.
• Submit documents to the Accounting and Corporate Regulatory Authority (ACRA) on your behalf.
• Support in opening your business bank accounts.
• Open a corporate bank account in Singapore with a 99% success rate.
• Get an affordable, professional registered office address for business.
• Support to open, authenticate, and manage Stripe PayPal Business in Singapore, Hong Kong, and the U.S.
• Handle all your tax accounting needs, timely annual filings, auditing, and more.

10. FAQ about limited liability partnership in Singapore

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