The Limited Partnerships Bill 2008 (the “Bill”) was passed in Parliament on 18 November 2008.
A limited Partnership (“LP”) is a new business structure which consists of one or more general partners and one or more limited partners.
A general partner is liable for all the debts and obligations of the LP incurred while he is a general partner of the LP. A limited partner will not be liable for the debts and obligations of the LP beyond the amount of his agreed contribution, solely by reason of his being a limited partner.
An individual or a corporation [defined as any body corporate formed or incorporated or existing in Singapore or outside Singapore and includes any limited liability partnership registered under the Limited Liability Partnerships Act (Cap. 163A) and any foreign company] may be a general partner.
A limited partner shall not take part in the management of the LP and will not have the power to bind the LP. If the limited partner takes part in the management of an LP, he will be liable for the debts and obligations of the LP incurred while he so takes part in the management as though he were a general partner.
The First Schedule to the Bill lists the various activities which will not be regarded as taking part in the management of the LP. Examples of these activities are investigating, reviewing, approving or advising on the accounts or affairs of the LP or exercising any rights as a limited partner of the LP, or calling, requesting, attending or participating in a meeting of the partners or limited partners of the LP.
The LP would be an attractive business structure for persons who propose to conduct business as investors but who do not wish to take an active role in the management of the business, and who prefer to entrust the management of the business to person or persons who have the expertise and skills to manage the business and to assume unlimited liability
The Bill provides that the Accounting and Corporate Regulatory Authority will be responsible for the administration of the Bill and provides for the appointment duties of the Registrar of Limited Partnership. Where every general partner of a LP is ordinarily resident outside Singapore, the Registrar may require a local manager to be appointed.
As a LP does not constitute a separate legal entity, tax treatment of the LP for the purposes of income tax and goods and services tax will be similar to that for a general partnership.
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