Limited Partnership (LP)
A Limited Partnership (LP) is a partnership of a minimum of two partners, with at least one general partner and one limited partner. There is no limit on the maximum number of partners. An LP does not have a separate legal entity from the partners, hence it cannot sue, be sued, or own property in its own name.
The Limited Partnership is formed in the same way as a partnership. Subject to the provisions of the Limited Partnerships Act (Cap 163B), the Partnership Act and the common law applicable to partnerships also apply to LPs.
A general partner can either be an individual or a corporation. They are responsible for the management of the LP and have unlimited liability for all debts, financial obligations, and litigations of the LP. They make all the decisions regarding the day-to-day activities of the business without consulting the limited partners. Any differences arising on ordinary matters may be resolved by a majority of the general partners.
An LP needs to appoint a local manager if all the general partners are not residents of Singapore (Singapore citizens, Permanent residents, or holders of EntrePass/ Employment Pass). The manager is responsible for performing all obligations of the LP and would be held liable in the same way as a general partner of the LP if the general partner would have defaulted in respect of such obligations.
A limited partner is not liable for debts and other financial obligations of the LP beyond his agreed contribution. Both an individual or a corporate can be a limited partner. They cannot participate in the management and decision-making on matters related to the LP. They are silent partners who only provide capital.
If a limited partner partakes in the management of the LP, they will lose their limited liability status and be treated as a general partner. In case there is no limited partner registered with ACRA, the LP’s registration will be suspended, and the partnership would be registered under the Business Names Registration Act. Once a limited partner is registered, the business’s registration as an LP will be restored.