Introduction of the LLP in Singapore
The Limited Liability Partnerships Act will commence operation on 11 April 2005 and will be administered by the Accounting and Corporate Regulatory Authority (ACRA) according to ACRA's News Release.
1. The Limited Liability Partnerships Act will commence operation on 11 April 2005 and will be administered by the Accounting and Corporate Regulatory Authority (ACRA). The creation of the LLP business vehicle in Singapore was one of the recommendations made in 2002 by the Company Legislation and Regulatory Framework Committee. Subsequently, a private sector-led study team, chaired by Mr Quek See Tiat (a member of the ACRA Board) and Mr Ronnie Quek (a lawyer in practice), was formed to work out the legal framework and consult the public. The LLP Act was passed in Parliament on 25 Jan 2005.
2. The introduction of the LLP will increase the variety of business structure options available in Singapore. As its name suggests, a limited liability partnership (LLP) will essentially be a partnership with limited liability. It will have legal personality and can enter into contracts, hold property and exist irrespective of changes in its partners. It will also retain some degree of internal flexibility of a partnership and have less onerous reporting requirements compared to companies. For example, an LLP need not file or audit its accounts nor is it required to appoint a company secretary.
3. Notwithstanding the greater flexibility, there are also safeguards in place to protect the LLP?s customers and creditors. These include the following:
4. Businessmen and investors can register an LLP via electronic filing at www.bizfile.gov.sg. The fee for registration of an LLP is $150. To facilitate partnerships and private limited companies converting to LLPs, the Act allows for their conversion for a fee of $100. By electing to convert, the properties, assets, interests, rights, privileges, liabilities, obligations and undertakings of the partnership or company will be transferred to the LLP under the conditions set out under the Act.
5. The ease and low costs of setting up an LLP makes the LLP an attractive option for businesses in Singapore. This further enhances Singapore as a good and progressive place for businesses.
6. The public can read more about the LLP at ACRA?s website at www.acra.gov.sg from 8 April 2005. ACRA will also be holding public education seminars on LLPs after its implementation, the details of which will be made available at the above website.
7. For clarification or enquiries on LLPs, please email us at acra_feedback@acra.gov.sg or call us at telephone number 63253722/63257502.
MS ANITAH ABDUL GHANI
MANAGER
PUBLIC AFFAIRS UNIT
ACCOUNTING AND CORPRATE REGULATORY AUTHORITY
8 APRIL 2005
1. The Limited Liability Partnerships Act will commence operation on 11 April 2005 and will be administered by the Accounting and Corporate Regulatory Authority (ACRA). The creation of the LLP business vehicle in Singapore was one of the recommendations made in 2002 by the Company Legislation and Regulatory Framework Committee. Subsequently, a private sector-led study team, chaired by Mr Quek See Tiat (a member of the ACRA Board) and Mr Ronnie Quek (a lawyer in practice), was formed to work out the legal framework and consult the public. The LLP Act was passed in Parliament on 25 Jan 2005.
2. The introduction of the LLP will increase the variety of business structure options available in Singapore. As its name suggests, a limited liability partnership (LLP) will essentially be a partnership with limited liability. It will have legal personality and can enter into contracts, hold property and exist irrespective of changes in its partners. It will also retain some degree of internal flexibility of a partnership and have less onerous reporting requirements compared to companies. For example, an LLP need not file or audit its accounts nor is it required to appoint a company secretary.
3. Notwithstanding the greater flexibility, there are also safeguards in place to protect the LLP?s customers and creditors. These include the following:
- An LLP will be liable to its clients for the action of its partners. If a partner is negligent, claims for losses resulting from his own negligence can also be made against him and his personal assets.
- An LLP is required to keep proper accounting records to enable true and fair views of financial statements to be prepared.
- An LLP is required to disclose its solvency or insolvency status annually.
- There is a comprehensive winding up process modeled after that in the Companies Act to ensure fair distribution amongst creditors.
- There is a ?clawback? mechanism to allow an LLP to recover amounts distributed within a period of three years preceding the commencement of the winding up of an LLP.
4. Businessmen and investors can register an LLP via electronic filing at www.bizfile.gov.sg. The fee for registration of an LLP is $150. To facilitate partnerships and private limited companies converting to LLPs, the Act allows for their conversion for a fee of $100. By electing to convert, the properties, assets, interests, rights, privileges, liabilities, obligations and undertakings of the partnership or company will be transferred to the LLP under the conditions set out under the Act.
5. The ease and low costs of setting up an LLP makes the LLP an attractive option for businesses in Singapore. This further enhances Singapore as a good and progressive place for businesses.
6. The public can read more about the LLP at ACRA?s website at www.acra.gov.sg from 8 April 2005. ACRA will also be holding public education seminars on LLPs after its implementation, the details of which will be made available at the above website.
7. For clarification or enquiries on LLPs, please email us at acra_feedback@acra.gov.sg or call us at telephone number 63253722/63257502.
MS ANITAH ABDUL GHANI
MANAGER
PUBLIC AFFAIRS UNIT
ACCOUNTING AND CORPRATE REGULATORY AUTHORITY
8 APRIL 2005
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