A lot of people wonder what are the differences between registering a business in one of the following forms:
- Partnership
- Limited Partnership
- Limited Liability Partnership
The major differences and similarities between these 3 types of businesses are as follows:
| Partnership | Limited Partnership | Limited Liability Partnership | |
| No. of partners | Between 2 to 20 persons. Partners may be individuals or corporate partners. | 2 or more persons. However, at leastone general partner and one limited partner. May be individuals or corporate partners | 2 or more persons. May be individuals or corporate partners. |
| Separate legal entity status | No separate legal entity. | No separate legal entity. | Separate legal existence. |
| Can sue or be sued in its own name | No | No | Yes |
| Can own property in its own name | No | No | Yes |
| Liability | Unlimited liabilityfor all partners. | Unlimited liability for the general partnerbut limited liabilityfor the limited partner Limited partner shall not take part in the general management of LP and if he does, will be treated as a general partner. | Limited liability for all the partners. However a limited partner is personally liable for claims from losses resulting from his wrongful act or omission. |
| Requirements | 1. Individual partners at least 18 years and above. 2. One partner is ordinarily resident in Singapore and if not, a local manager must be appointed. 3. Cannot be undischarged bankrupt or a company in liquidation. 4. All individual partners who are Singapore citizens and PRs must have their Medisave paid up to date with CPF Board. | 1. Individual partners at least 18 years and above. 2. One general partner is ordinarily resident in Singapore and if not, a local manager must be appointed. 3. Cannot be undischarged bankruptor a company in liquidation. 4. All individual partners must have their Medisave paid up to date before they register a new LP, become the new partner of an existing LP or renew the registration of their LP. | 1. Individual partners at least 18 years and above. 2. LLP must have at least one manager who is ordinarily resident in Singapore 3. Cannot be undischarged bankrupt or a company in liquidation. 4. Cannot be disqualified as an unfit manager of an insolvent LLP 5. Cannot be disqualified to act as a manager of a former LLP wound up on the ground of national security. 6. Cannot be convicted of offences involving fraud or dishonesty or other offences connected with the formation or management of a LLP. 7. Cannot be disqualified under S149, 149A or S154 of the Companies Act |
| Profits and Tax | Each partner is taxed individually on their shares of the partnership’s profits | Each partner is taxed individually on their shares of the LP’s profits | Each partner is taxed individually on their shares of the LLP’s profits |
| Audit required | No | No | No |
| AGM | No | No | No |
| Annual returns | No | No | No |
| Filing of financial statements with ACRA required | No | No General partner of LP is required to keep proper accounting recordsof LPs. | No LLP is required to keep proper accounting records of LPs. |
| Annual Declaration | No | No | LLP must lodge an annual declaration with ACRA stating whether LLP is solvent or insolvent. Subsequent declaration must be lodged once every calendar year and not more than 15 months after the previous annual declaration. |
| Dissolution | Close the partnership before expiry of the registration period and file a Notice of Termination If close the partnership after expiry of the registration period and not renewed, file a Notice of Cessation. | If a LP is dissolved, file a Notice of Dissolution of LP Where a LP ceases to carry business, file a Notice of Cessation of Business. | A LLP may apply for a striking off or be wound up (either members’ voluntary winding up or creditors’ voluntary winding up). |
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