A Limited Partnership (LP) is a relatively new vehicle for conducting business in Singapore. It is a partnership that consists of at least two partners with at least one general partner and at least one limited partner. Unlike a body corporate board or an LLP, an LP is not a separate legal entity distinct from the partners. It cannot therefore hold property in its own name and sue or be sued in its own name. Any individual or company can be either a general partner or a limited partner. A local manager is not mandatory unless all the partners are resident outside Singapore. The general partner takes responsibility for all the actions of the LP and is liable for all the debts and obligations of the LP. A limited partner is liable only to the extent of his agreed contribution to the LP if he or she does not participate in management.
If no limited partner is registered with ACRA, the LP registration will be suspended and the general partner will be treated as registered under the Business Registration Act. Once a new limited partner is registered, the LP registration will be restored and the Business Registration Act registration will be cancelled. When the LP is being registered, the applicant is required to indicate whether the LP falls under Regulation 12 of the LP Regulations. He or she is also required to show the name of the licensed fund manager. Regulation 12 applies where:
- an LP is primarily an investment fund
- a “licensed fund manager” manages the fund (a “licensed fund manager” is licensed under the Securities and Futures Act to carry on fund management business. He can be exempted from being licensed under Section 99 of that Act).
Applications to register a new LP can be made on BizFile, ACRA’s electronic filing and information retrieval system. You can use the services of a professional such as a lawyer, an accountant or a service bureau to handle the online application on your behalf. Your application may be referred to another government department (for instance, the Ministry of Education if you want to establish a private school). In this case, registration may take anything between two weeks and two months. The LP can commence business on completion of registration provided no other licenses or permissions are required.
An LP must appoint a local manager who has reached the age of at least 18 years if all the general partners are “not ordinarily resident” in Singapore. The local manager takes personal responsibility for all the obligations of the LP and has the same responsibilities, liabilities and penalties as a general partner of the LP if the general partner defaults on his obligations. The local manager cannot be an undischarged bankrupt unless he is taking the permission of the High Court or the Official Assignee. Every LP must have at least two partners (one general and one limited) and that is no limit on the number of partners. A general partner has unlimited liability and can participate in the management of the LP. A limited partner has liability only to the extent of his agreed investment but, if he participates in management, he will be treated as a general partner.