With effect from 4 May 2009, Accounting and Corporate Regulatory Authority (“ACRA”) has launched the Limited Partnership (“LP”) as an additional vehicle to conduct business in Singapore. It is formed under the Limited Partnership Act.
It is a partnership consisting of two or more persons, with at least one general partner and one limited partner, but it does not have maximum limit on the number of partners. Further, both can be individuals (at least 18 years old) of body corporate (company or other LLP). If all the partners are not ordinarily resident in Singapore, LP must have at least one manager ordinarily resident in Singapore. The general partner of LP will be held liable for debts and losses incurred by the LP. However, a limited partner does not held liable for the debts or obligations of LP beyond amount of his agreed contribution, provided he does not take part in the management of the LP.
There is no requirement for LP to have its accounts audited and submit Annual Returns to ACRA. Nevertheless, every general partner should ensure keeping of accounting and other records that will sufficiently explain the transactions and financial positions of the LP. As far as tax is concern, the partners will be assessed to tax on their share of profits from the LP.
The registration of LP is valid for one year and is renewable for subsequent year. It exists as long as there is one general partner and one limited partner. The partnership will be suspended if there is no limited partner. It will thus be converted to a firm registered under the Business Registration Act. Once a new limited partner is appointed, the registration of the LP will be restored to “live”.