Registration of Other Legal Entities
Sole Proprietorship and Partnership (LLP/LP/P) Registration
Sole Proprietorship
A sole proprietorship is a business firm with only one owner. Such a corporate structure is only suitable for a single-owner type of small business that does not carry any, if not many, risks. Unlike a private limited liability company, a sole proprietorship does not provide limited liability protection. This means your personal assets could be affected by any business risks that come.
Limited Liability Partnership (LLP)
Among the three types of corporate partnership entities, LLP is the most advanced business incorporation structure. As a hybrid, it combines both the features of a partnership and a company.
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). This structure is primarily attractive for two or more professionals who 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 an LLP are usually responsible for cultivating their own clients based on the partner’s distinct and specific area of focus.
Some useful information to note:
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It is a legal entity (i.e. it bears the capacity to sue or be sued in its own name, and can own or hold any property).
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All LLPs must appoint a local manager.
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The personal assets of the partners are protected and owners are not held personally accountable for the wrongdoings of their partners.
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Any changes in the LLP do not affect its existence, rights or liabilities (e.g. resignation or death of partners).
Limited Partnership (LP)
A LP is the next alternative for a partnership entity in Singapore. It introduces the concept of a limited partner alongside a general partner. The liabilities of limited partners are limited to their investment in the partnership (be it capital or property). Notably, such partners are not permitted to participate in the management of the business. It may be observed that this does not prove to be the most appealing partnership form for most people in Singapore.
Some useful information to note:
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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).
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A general partner has unlimited personal liability and can be appointed as the manager of the LP.
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A limited partner is not liable for any debts and obligations beyond his agreed investment in the LP.
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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)
As its name suggests, a partnership is a 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:
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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).
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Each partner is personally accountable for all risks, debts, and losses.
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Profits form part of each partner’s personal income and are taxed at personal income tax rates.
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A partner can also be held accountable for losses incurred by his/her other partners.
Branch office registration
Registering a Singapore branch office is one of the three options for foreign companies looking to setup their presence here. The other two options are through a Singapore subsidiary or a representative office.
A branch office stands as a proper legal entity once registered with the company registrar in Singapore. It is considered as a local extension of the foreign company and not as a separate legal entity.
Representative office registration
An international company keen to explore potential opportunities in Singapore and the South-East Asian 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 mainly as a liaison office. Hence, it bears no legal status, and cannot conduct any business activities of profit yielding nature.
Given its lack of legal status, a representative office is not permitted to conclude contracts, negotiate or open a Letter of Credit, get involved in trading, leasing a warehouse, etc. It can only engage in activities such as conducting market research and feasibility studies.
In short, a representative office acts as a temporary administrative liaison that is built to manage and coordinate non-commercial activities of a company based outside of Singapore.
Offshore companies incorporation
An offshore company is one that is incorporated in a jurisdiction outside where it mainly carries out its operations or the company’s principle investors reside. Principle advantages of incorporating an offshore company include simpler reporting requirements, ease of company set-up, ongoing administration, etc.
The choice of a particular jurisdiction for incorporating such an entity is an important decision as it can have a significant impact on your business.