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Is a Limited Liability Partnership (LLP) better than a Traditional Partnership?

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llpSingapore company registration for incorporating a limited liability partnership (LLP) is useful for professionals who have enough experience and the urge to be entrepreneurs.

If you are thoroughly bored with the 9 A.M. to 5 P.M. office routine then why don’t you find a like-minded partner and form a Limited Liability Partnership (LLP) in Singapore to cash on your combined experience from divers fields. SBS Consulting can help you with this task.

Two or more professionals or corporate entities or LLCs can come together and form a Singapore company in the shape of an LLP.

Why Form a Limited Liability Partnership?

The best way of exploiting a limited liability partnership is to form it with an entity which can combine its professional services with that of yours in order to offer a complete package of services to your would be clients.

How an LLP Works?

An LLP is a blend of traditional partnership and a private limited company. Business relations among partners are controlled by the partnership agreement or deed. Such an agreement put together by a solicitor with the agreement of partners, records capital input, sharing of profit and loss, duties and time investment by each partner. However, an LLP interacts with its clients with the strength of a private limited company.

  1. A limited liability partnership has separate legal existence.
  2. It can sue and be sued in its own name.
  3. It is a legal person and has all the rights of a naturally born person.

Partner’s Liabilities in a Limited Liability Partnership

Don’t get fooled by the term ‘Partnership’ and don’t associate LLP’s business structure with that of Old Traditional Partnerships. In a traditional partnership, its partners use to pledge their personal assets to the losses or debts incurred during its course of business. This is not the case with an LLP when it comes to partners’ liabilities.

  1. An LLP is responsible for the losses and debts incurred during its business activities.
  2. The partners of an LLP have limited liability that extends to their investment in the partnership.
  3. A partner in an LLP is responsible for the losses or debts caused due to his or her own negligence, misconduct or malpractices. However, he or she is not responsible for the same because of the other partner/s.
  4. A partner in an LLP is also responsible for the losses or obligations that arise out of negligence, malpractice or misconduct by an individual under his or her direct supervision.

When it comes to maintaining records, an LLP behaves like a private limited company. It is mandated for an LLP to produce, maintain and submit account records, accounts for the loss and profit and balance sheets to the authorities. It must also declare its solvency or insolvency to the registrar of companies. From trading point of view forming a starting company in Singapore as an LLP is not that productive, but, in certain type of businesses it is a great asset. This business structure is built with the intention of minimizing malpractice claims against uninvolved partner/s.