Sole Proprietorship and Partnership (LLP/LP/P) registration

Sole Proprietorship
A sole-proprietorship is a business firm with only one owner. Such business structure is only suitable for very small single-owner type business that does not carry any risks. Unlike a private limited liability company, a sole proprietorship does not provide limited liability protection, hence your personal assets could be affected from business risks.

Some useful information to note:

  • It is not a legal entity (i.e. it cannot sue or be sued in its own name and it cannot own or hold any property).
  • The owner is personally accountable for all risks, debts and losses.
  • Profits are taxed at personal income tax rates.

Limited liability Partnership (LLP)

Among the three types of partnership business entities, LLP is the most recent and most advanced business incorporation structure. As a hybrid, it combines the features of both partnerships and companies.

Registering an LLP gives owners the flexibility of operating as a partnership while enjoying the many advantages one could derive from a corporate body like a private limited company (Pte Ltd). A LLP is primarily meant for carrying a profession (for example, accountants, law firms, architects, etc.) where two or more professionals would like to build a joint practice in a common field. The owners must enter into detailed agreements with regards to division of profits and management responsibilities. Partners in a limited liability partnership are usually responsible for cultivating their own clients based on the partner’s specific area of focus.

Some useful information to note:

  • It is a legal entity (i.e. it can sue or be sued in its own name and can own or hold any property).
  • It is compulsory for all LLPs to appoint a local manager.
  • The personal assets of the partners are protected and owners are not personally accountable for the wrongful acts of other owners.
  • Any changes in the LLP (e.g. resignation or death of partners) do not affect its existence, rights or liabilities.

Limited Partnership (LP)
The concept of limited partnership is an alternative to the general partnership type of business form in Singapore. It introduces the concept of a limited partner in addition to a general partner. The liabilities of limited partners are limited to their investment in the partnership (capital or property). Nonetheless, such partners are unable to participate in the management of the business in a limited partnership. In a nutshell, even a limited partnership in Singapore is not a very appealing instrument for establishing a business for most people.

Some useful information to note:

  • It is not a legal entity (i.e. it cannot sue or be sued in its own name and it cannot own or hold any property).
  • A general partner has unlimited personal liability and can be appointed as the manager of the LP.
  • A limited partner is not liable for any debts and obligations beyond his agreed investment in the LP.
  • If a limited partner takes part in the management of the LP, he will have unlimited liability as if he were a general partner.

Partnership (P)
Partnership suggests a business firm owned by 2 to 20 individuals or companies who carry on a business with the objective of making profit and sharing it between them. All partnerships must be registered with the Accounting and Corporate Regulatory Authority (ACRA).
Some useful information to note:

  • It is not a legal entity (i.e. it cannot sue or be sued in its own name and it cannot own or hold any property).
  • Each partner is personally accountable for all risks, debts and losses.
  • Profits form part of each partner’s personal income and are taxed at personal income tax rates.
  • You can also be made accountable for losses incurred by other partners.

Branch Office registration

Singapore branch office is one of the three options for foreign companies wishing to setup their presence in Singapore. The other two options include a Singapore subsidiary or a representative office. A Singapore branch is a proper legal entity once registered with the company registrar in Singapore. A Singapore branch is considered an extension of the foreign company and not as a separate legal entity.

Representative Office registration

A foreign company that is keen to explore potential opportunities in Singapore and the region, may set up a representative office before committing any large scale investments. Unlike a subsidiary or a branch office, a Singapore representative office is viewed only as a liaison office and as such has no legal status. It cannot conduct any business activities of profit yielding nature.

Given its lack of legal status, a representative office is disallowed from concluding contracts, negotiating or opening Letter of Credit, getting involved in trading, leasing a warehouse, etc. It can only engage in activities such as conducting market research and feasibility studies.

In a nutshell, a representative office is a temporary administrative office that is setup to manage and coordinate non-commercial activities of a foreign company.

Offshore Companies incorporation

An offshore company is one that is incorporated in a jurisdiction other than the jurisdiction that constitutes its main place of operations or where the company’s principal investors reside. Some of the principal advantages of incorporating an offshore company include simpler reporting requirements, ease of company set up and ongoing administration, etc. The choice of a particular jurisdiction for offshore company incorporation is an important decision as it can have a significant impact on your business.