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What is a Limited Liability Partnership (LLP)

LLP

With us, you will experience the fastest Singapore limited liability partnership (LLP) formation process. Our rates are the most competitive in town. Besides, we also assist in providing you one local company secretary which is a mandate put forth by the Singapore Companies Act.

A Limited Liability Partnership (LLP) is a tool for conducting business in partnership in Singapore. It allows owners the flexibility of functioning as a partnership. At the same time, an LLP behaves as if it is a separate legal entity like a private limited company.

LLP’s are designed to support individuals having professional qualifications and urge to be entrepreneurs. By forming an LLP, these individuals can practice their professions as partners. They face the other business entities or individuals as a private limited company, but, with each other they deal on the level of partners.

This simply indicates that the LLP acts as a body corporate and is allowed to have a legal personality very distinct from its partners. The LLP has perpetual existence. Any change in the partners of an LLP does not influence its functions, existence, rights or liabilities.

Partners in an LLP

A partner is any professional entity who has agreed to form a partnership with at least one another professional entity in harmony with the LLP agreement. The law says that each LLP must at least have two professional entities as partners.

The partner in an LLP is not only limited to the individuals, but, a local or a foreign company or another LLP can act as a partner.

As an LLP has legal existence, it has the rights of a natural person. It means:

  1. It can be sued in the court of law and on the other hand, it can also sue another entity in its own name;
  2. It can acquire and hold property in its name;
  1. It can have a common seal in its name and it can do everything in its name that the other corporate bodies are allowed to do and suffer

The Liability of Partners of an LLP

The partners of an LLP do not carry the risk of being responsible for the debts of the LLP. However, they are responsible for the losses which are the outcomes of their own wrongful acts or omissions. Their liabilities do not extend to the losses incurred due to the wrongful acts or omissions made by the other partners.

An LLP functions, when it comes to maintaining records, as any other companies. It must maintain account records, accounts for the loss and profit and balance sheets of its business transactions. Such data makes statement about the business transactions and the financial health of the LLP. Failing to maintain these records bring penalties in the form of fines, imprisonment or both, to the LLP and its partners.

Each year, an LLP must declare its solvency or insolvency to the Registrar. As such documents are part of public records; they are made available for the consumption of the public.

Selecting a Name for the LLP

There are some restrictions about selecting a name for an LLP.

  • One should not choose an undesirable name for the LLP.
  • It shouldn’t resemble with the name of any existing limited liability partnership, corporation, company or the name of a business concern.
  • Some names are reserved under the Business Registration Act, the Limited Liability Partnerships Act or the Companies Act. Name of the LLP should not be identical to such names.
  • It should not be of a type that the Minister has ordered the Registrar not to register an LLP with.

It is the responsibility of the partners to be cautious and come up with unique name for their partnership. This will reduce the chances of mistakes being made in correctly identifying the business entities. As the last resort, the Registrar has the full legal support to order a change in the name of limited liability partnership upon receipt of an objection.

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