It is a smart decision to choose a limited liability partnership rather than running your business as a proprietorship. You must have the knowledge about the advantages of registering an LLP, that’s why you have chosen this form of business incorporation. Here we intend to give you an insight into the compliance and requirements of LLPs.
You require a registration firm – Accounting and Corporate Regulatory Authority (ACRA) is responsible for registering and incorporating LLPs in Singapore. It mandates the foreigners to apply through a registration firm. Although not mandatory but locals too are recommended to hire a registration firm. When you consult experts like KC Ha Consulting, you can typically get the procedure done in a single day.
You’ll need a multi-currency account – Once ACRA registers your LLP, you will get the notification and the certificate via e-mail. You will need to open a bank account in the name of the LLP upon successful registration. You can have multiple accounts for different currencies. But, a multi-currency account is recommended for ease of operation, especially, when your business is not very big.
Mandatory number of partners – Although LLP enjoys perpetual succession just like a company it cannot have less than two partners at any point in time. The business registered as LLP remains unaffected by the death, retirement or insolvency of individual partners. But, you need to maintain the minimum number of partners to keep the entity legal.
Liability of own misconduct – The limited liability form of partnership does not insulate the defaulter partner. If you as a partner indulge in some misconduct you will be liable for the losses incurred by any person or the business. The claims can be made against your personal assets too. But, if you are innocent you won’t have to pay for someone else’s mistakes.
The book-keeping rule – All Singapore LLPs are required to keep books of accounts updated with all the financial and non-financial transactions. The books should show the true financial position of the LLP. The law mandates you to maintain all financial books and records for seven consecutive years.
Solvency declaration by the manager – It is a rule in Singapore that the manager of an LLP will submit an annual declaration of his solvency position to the registrar. The first declaration is to be submitted within 15-months from the incorporation of the LLP. After that, the manager has to submit such declaration once in every calendar year. And, no two declarations can have a time gap of more than 15-months.
Declaration of your status – If you are operating an LLP in Singapore it is your legal duty to share this information with everybody you are dealing with. All your official correspondence, invoices, and other documents must bear the declaration that you are a limited liability partnership firm along with the name and the registration number.
Inform the changes – Whenever an LLP intends to make a change in the particulars submitted to the registrar at the time of incorporation the same needs to be informed to the registrar within 14 days.
If you comply with the law, LLP is the best choice for running a partnership business.