What is Limited Partnership

Understanding Limited Partnerships in Singapore

In Singapore, a Limited Partnership operates with at least two partners: one general partner and a limited partner. While corporations are recognized as separate legal entities, an LP isn't. It can't own assets or face lawsuits under its name. Instead, the LP is a partnership that allows individuals and corporations to pool their resources and expertise to pursue common business goals. Both individuals and corporations can become general or limited partners in an LP. If all general partners are abroad, there's no need to designate a local manager.

General partners bear the responsibility for the LP's actions and financial commitments. They are actively involved in managing the partnership and are accountable for its decisions and operations. Limited partners, on the other hand, have limited liability. They are only liable to the extent of their initial contribution, provided they don't participate in managing the LP. This means that limited partners can invest in the partnership without risking their personal assets beyond their initial investment.

It's noteworthy that if an LP does not have a registered limited partner, its registration is held back. During this period, the general partner is registered under the Business Names Registration Act. However, with the registration of a new limited partner, the LP’s status is reinstated.

Roles within Limited Partnerships

Partners in an LP:

Every LP requires at least one general and one limited partner. While there's no upper limit on the partnership number, it's important to consider the dynamics and responsibilities that come with a larger partnership. Both individuals and companies can be general partners, while limited partners can be individuals, corporations, or unregistered foreign entities.

General partners play an active role in managing the LP and are accountable for its actions. They make key decisions, oversee operations, and ensure the partnership's success. In contrast, limited partners have a more passive role. They provide capital and expertise but do not participate in the day-to-day management of the partnership. Limited partners bear financial responsibility only up to their initial investment limit. They must refrain from participating in managing the LP to avoid being treated as a general partner with unlimited personal liability.

In cases where all general partners are non-residents of Singapore, a local manager (minimum 18 years old) must be appointed to handle obligations. The local manager acts as a point of contact and assumes certain responsibilities on behalf of the partnership. They face liabilities and penalties if the general partner defaults, ensuring that there is accountability even when the general partners are located overseas.

Foreign Involvement in Limited Partnerships

Foreign individuals wishing to establish an LP in Singapore must appoint a local manager. They can live abroad, but if they wish to manage the LP's operations in Singapore, they need approval from the Ministry of Manpower. This ensures that there is local oversight and compliance with Singapore's regulations. To register online, foreigners require a registered filing agent's services, or if they possess a Singpass, they can use BizFile+ with their NRIC or FIN.

Registration Details and Processing Duration

The registration process for an LP involves certain costs. The Name Application Fee is $15, while the 1-year LP Registration Fee is $100 and the 3-year LP Registration Fee is $160. These fees cover the administrative and processing costs associated with registering the partnership.

Applications are usually processed within 15 minutes after payment. This speedy processing time allows entrepreneurs to quickly move forward with their business plans. However, it's important to note that if further review or approval is needed from another agency, such as the Ministry of Manpower or the Monetary Authority of Singapore, it may take between 14 to 60 days. This additional review ensures that all necessary regulatory requirements are met and that the LP is compliant with the relevant laws and regulations.

Conclusion

By engaging with this guide, you have taken the first step towards your entrepreneurial journey in Singapore. Understanding and applying these steps carefully will be crucial to your business's eventual success and longevity. Singapore's Limited Partnership offers a flexible and attractive business structure for entrepreneurs looking to tap into the country's thriving business ecosystem. With the right knowledge and guidance, you can unlock the full potential of doing business in Singapore through a Limited Partnership.