Guide to Setting Up a Limited Liability Partnership (LLP) in Singapore

Singapore's pro-business environment makes it an attractive destination for entrepreneurs and professionals looking to establish their ventures. One popular business structure is the Limited Liability Partnership (LLP), which combines the flexibility of a partnership with the benefits of limited liability. This guide will walk you through what an LLP is, its advantages, and the step-by-step process to set up one in Singapore.

What is a Limited Liability Partnership (LLP)?

An LLP is a business structure that offers a unique combination of flexibility and protection. It is a legal entity separate from its partners, meaning that:

• Limited Liability: Partners are not personally liable for the debts or liabilities of the LLP beyond their agreed contributions.
• Flexibility: The operational structure of the LLP can be customized according to the partnership agreement.
• Perpetual Succession: The LLP continues to exist regardless of changes in its partners.

An LLP is ideal for professionals, startups, and small businesses looking for a flexible structure with liability protection.

Benefits of Setting Up an LLP

1. Limited Liability Protection

Partners' personal assets are protected from the LLP's debts and obligations, unlike in a traditional partnership.

2. Separate Legal Entity

The LLP can own assets, enter into contracts, and sue or be sued in its name.

3. Tax Transparency

Profits from the LLP are taxed at the partners' personal income tax rates, avoiding corporate tax rates.

4. Flexibility in Operations

Partners have the freedom to define their roles, responsibilities, and profit-sharing ratios in the partnership agreement.

5. Credibility

An LLP is viewed as a legitimate business structure, boosting confidence among clients and stakeholders.

Step-by-Step Guide to Setting Up an LLP in Singapore

1. Choose a Name for Your LLP

Select a unique and appropriate name for your LLP. The name must:

• Not be identical or too similar to existing business names.
• Not infringe on trademarks.
• Be approved by the Accounting and Corporate Regulatory Authority (ACRA) .

You can check the name's availability and reserve it via ACRA's BizFile+ portal.

2. Meet the Minimum Requirements

To register an LLP, you must meet these criteria:

• At Least 2 Partners: Partners can be individuals or corporate entities (local or foreign).
• Appoint a Manager: At least one manager must be a Singapore resident (Citizen, Permanent Resident, or EntrePass holder).
• Registered Business Address: The LLP must have a local physical address in Singapore (no P.O. boxes).

3. Prepare the Required Documents

The following documents are needed for registration:

• Proposed LLP name approval notice.
• Details of all partners and manager(s).
• Signed consent to act as manager.
• Registered office address.
• Partnership agreement (optional but recommended for clarity).

4. Submit the Application via BizFile+

Log in to BizFile+ with your CorpPass and complete the registration process. The process is straightforward and can be completed within a day if all information is accurate.

5. Pay the Registration Fees

The registration fees are:

• S$15 for name reservation.
• S$100 for LLP registration.

6. Open a Corporate Bank Account

Once your LLP is registered, open a corporate bank account to manage the LLP's financial transactions. Most local and international banks in Singapore offer business banking services.

7. Comply with Post-Registration Obligations

After incorporation, ensure your LLP meets the following obligations:

• Annual Declaration: Submit an annual declaration of solvency or insolvency to ACRA.
• Maintain Accurate Records: Keep financial records, including income and expenses.
• File Taxes: Partners must report their share of the LLP's income in their personal tax filings.

Common Mistakes to Avoid When Setting Up an LLP

1. Skipping the Partnership Agreement: A well-drafted agreement avoids disputes among partners.
2. Failure to Appoint a Resident Manager: This is a statutory requirement.
3. Incomplete Documentation: Ensure all forms and details are accurate to avoid delays.
4. Neglecting Post-Registration Obligations: Annual declarations and compliance are mandatory to avoid penalties.

Why Engage Professional Services?

While the process of setting up an LLP is relatively straightforward, professional assistance can help you:

• Navigate regulatory requirements with ease.
• Draft a comprehensive partnership agreement.
• Ensure ongoing compliance with ACRA and IRAS.

At Apexia Corporate Advisory, we specialize in helping businesses like yours establish and maintain LLPs in Singapore. From incorporation to compliance, we've got you covered.

Conclusion

A Limited Liability Partnership offers the perfect balance of flexibility and liability protection for professionals and businesses in Singapore. By following the steps outlined above, you can set up your LLP quickly and efficiently. Need help with the process? Apexia Corporate Advisory is here to guide you every step of the way. Contact us today for expert assistance!