1.One type of business structures usually set up in Singapore is limited liability partnerships. It is a business owned by at least two partners. The partner in an LLP can be an individual, a local company, a foreign company or another LLP. A special feature of an LLP is that it gives owners the flexibility of operating as a partnership and at the same time, an LLP has a separate legal identity and limited liability like a private limited company.
2. A separate legal entity for an LLP means that it is a body corporate and has a legal personality separate from its partners (similar to a private limited company where the company is a separate legal entity separate from its shareholders). Consequently, an LLP has perpetual succession, which means any change in the partners of an LLP will not affect its existence, rights or liabilities.
3. As a separate legal entity, an LLP is allowed to do the following:
- Suing and being sued in its name;
- Acquiring and holding property in its name;
- Having a common seal in its name and
- Doing such other acts and things in its name, as bodies corporate may lawfully do and suffer.
4. A separate legal personality of an LLP also means that the partners of the LLP will not be held personally liable for any business debts incurred by the LLP. A partner may, however, be held personally liable for claims from losses resulting from his own wrongful act or omission, but will not be held personally liable for such wrongful acts or omissions of any other partner of the LLP.
5. Like all other business entities in Singapore, an LLP is required to keep proper accounting records. Annually, it needs to prepare profit and loss accounts and balance sheets that detailed the transactions and financial position of the LLP. This annual profit and loss accounts and balance sheets are then used to compute and file an annual income tax return to IRAS.
6. In addition, the LLP must submit to the Registrar an annual declaration of solvency or insolvency (i.e. being able or unable to pay its debts respectively) which will be made available to the public.
Under Section 30(1) of the Limited Liability Partnerships (LLP) Act, the manager of every LLP is required to lodge a declaration stating whether the LLP is solvent or insolvent (i.e. able to pay off its debts or not).
Under Section 30(3), the first annual declaration must be lodged within 15 months from the date of the registration of the LLP. Subsequent declarations must be lodged once every calendar year and not more than 15 months after the lodgment of the last declaration.
If the LLP requires an extension of time to lodge the declaration, it can apply for an extension of time under Section 30(4) of the LLP Act.
7. PL Biz Consulting Pte Ltd is an ACRA Registered Filing Agent and Registered Qualified Individual since 2016. Please come and talk to us if you need help with your registration and filing tax return of a limited liability partnership. We at PL Biz Consulting Pte Ltd have been helping many entrepreneurs and business owners to register and file their tax return since 2007.
