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[ESTABLISHING A BUSINESS ENTITY IN SINGAPORE]
agreement. It should, however, be noted that such a restriction and limitation is between the partners only and will not affect outsiders dealing with the partner unless the restriction/limitation is known by that outsider. Retired partners remain liable for obligations incurred during their partnership. Partners are taxed individually on their share of the partnership’s profits. Partners A partner must be:- (1) at least 18 years old and of full legal capacity; (2) a Singapore Citizen, Singapore Permanent Resident, or a foreigner holding an EntrePass. Partners are agents of each other and of the partnership firm. A partner’s acts in relation to the business operations of the firm will be treated as being the actions of the firm and all its partners. The firm and all its partners may be sued for any wrongful act committed by any partner in the course of the business of the firm or with the authority of his co-partners. Authorised Representative At least one locally resident authorised representative must be appointed if all the partners are foreigners residing overseas. A partnership may be converted into a limited partnership. (4) Limited Partnership (LP) The structure and basic requirements under a partnership generally apply to an LP save that an LP is a partnership of a minimum of two partners with at least one “general partner” and one “limited partner” pursuant to an LP agreement. Partners can be individuals or corporations. The existence of limited partner(s) and the need for registration
pursuant to the Limited Partnerships Act 2008 distinguishes an LP from a partnership. Partners The general partner has the same role as a partner in a partnership. A general partner is responsible for the actions of the LP and is liable for all debts and obligations of the LP. On the other hand, a limited partner is not liable for debts and obligations of the LP beyond his contribution agreed in the LP agreement, provided he does not take part in the management of the LP. The limited partner is not entitled to dissolve the LP, and the LP is not dissolved by the death, dissolution, bankruptcy or liquidation of the limited partner. Manager Appointing a local manager is not mandatory unless all the general partners are residing outside Singapore. The local manager is personally responsible for discharging all obligations of the LP. He is subject to the same responsibilities, liabilities and penalties as a general partner of the LP if the general partner defaults in respect of such obligation. The manager of an LP must not be an undischarged bankrupt (unless he has obtained permission from the High Court or of the Official Assignee). (5) Limited Liability Partnership (LLP) An LLP is a mix between a company and a partnership. It gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company. The partners’ relationship is governed by the LLP agreement entered into between the
ILN Corporate Group – Establishing a Business Entity Series
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