Differences between a Singapore LLC and an LLP

By: singaporestartup | Posted: 18th October 2010

A Singapore LLC refers to a limited liability company. An LLP is a limited liability partnership. As the words "limited liability" are synonymous with both terms, some may think that there is little or no difference between the two. This is not the case. Here are some attributes of each, so you will know how to register your Singapore business.

LLC in Singapore
The majority of businesses that register in Singapore do so as a private limited liability company. This makes the business a separate entity from the shareholders. The shareholders are not responsible for debts of the business, beyond the amount of money that they have invested in the share holdings. Their liability is therefore limited.

LLP in Singapore
A limited liability partnership (LLP) has some of the features of an LLC. They partnership enjoys the ability to operate as a separate entity. It is separate from the partners that own it. The LLP may purchase and maintain property in the name of the partnership. It may also engage in litigation against others and it may be sued by others.
If the LLP incurs debts in business, the partners are not responsible. The LLP is the responsible party. The LLP must also keep complete business records as a corporation does. This includes things like balance sheets and reports of losses and profits.

Differences
A Singapore LLC may be dissolved at the time of death of its owner. An LLP does not have this feature. The death of a partner will not affect the partnership. It will continue.

A Singapore based LLC is used for many types of business. The LLP is a relatively new entity in Singapore. It is designed for law firms, accountants, and those types of concerns. When two or professionals practice in the same chosen field, it gives them many advantages. One important advantage is the protection of being a private entity, separate from the people in the partnership.
In an LLP, one partner may enter into business and legal agreements without consulting or receiving consent of the other partners. An LLC does not operate this way. An LLC is easier to transfer ownership than the LLP.

Reasons to Choose a Singapore LLC
If you are not a professional, the LLC will usually be your best choice. Remember that the LLC is a private corporation. At some point, your company may grow and be one of the most notable businesses in your field.
When this happens, you may wish to make company stock available to the public. If you do, your company will no longer be an LLC but an LTD or limited corporation. Public corporations have stricter regulations and rules, than private companies.

Summary
Some may think that there is no difference between a Singapore LLC and an LLP. This is not the case. An LLP is designed for professionals like lawyers and architects. It affords business advantages that they cannot receive on their own. Most companies will register as an LLC in Singapore. This is a private company and a separate entity from the people. If the company goes public with its stock, it is then an LTD or limited corporation and subject to regulations of public corporations.

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Tags: amount of money, profits, attributes, debts, limited liability company, balance sheets, shareholders, law firms, litigation, limited liability partnership, accountants, business records, responsible party, time of death