The Limited Liability Partnership in Singapore: What an LLP Is, and Who It Actually Suits

A limited liability partnership is a body corporate with its own legal personality. It owns property, contracts and is sued in its own name, and its partners are not personally liable for its obligations. What each partner remains liable for is their own wrongful acts.

Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.

That last sentence is the whole structure. Everything useful about an LLP, and every mistake people make with one, follows from it.

This is part 3 of our series on choosing a business structure in Singapore, after the sole proprietorship and general partnership, where liability is unlimited and shared.

An LLP is not a partnership with a safety net

It is a body corporate that has been given a partnership’s internal flexibility.

Section 4 of the Limited Liability Partnerships Act 2005 states it directly: an LLP is a body corporate, formed by registration, with legal personality separate from that of its partners, and with perpetual succession. Section 4(3) adds that a change in the partners does not affect its existence, rights or liabilities. Section 5 gives it capacity in its own name to sue and be sued, and to acquire, hold and dispose of property.

Then section 10 does something that surprises people who assume an LLP is a species of partnership: except as otherwise provided by the Act, the law relating to partnerships does not apply to an LLP. The Partnership Act 1890 is switched off, so the default rules that govern an ordinary firm on profit shares, dissolution and liability are simply not there. What governs the internal relationship instead is the limited liability partnership agreement, and where the partners have not written one, the default provisions in the Act’s schedules.

Hence the first practical warning here. An LLP without a properly drafted agreement is not “a partnership with limited liability”. It is a body corporate running on statutory defaults that nobody in the room has read.

What the partners are, and are not, liable for

Section 12 of the LLP Act is the provision to know, and it repays reading in order.

• Section 12(1). An obligation of the LLP, whether in contract, tort or otherwise, is solely the obligation of the LLP.
• Section 12(2). A partner is not personally liable for that obligation, directly or indirectly, solely by reason of being a partner.
• Section 12(3). But that does not affect a partner’s personal liability in tort for their own wrongful act or omission. What it removes is liability for the wrongful act or omission of any other partner.
• Section 12(4). Where a partner is liable to an outsider for their own wrongful act in the course of the LLP’s business or with its authority, the LLP is liable to the same extent.
• Section 12(5). The liabilities of the LLP must be met out of the property of the LLP.

Read together, this is a targeted protection, not a general one. Compare it with an ordinary partnership, where section 12 of the Partnership Act 1890 makes every partner jointly and severally liable for the wrongs of the firm.

An architect in an ordinary partnership whose colleague signs off a negligent design is exposed to the whole claim. The same architect in an LLP is not, because section 12(3) confines the exposure to the partner who did the work. But if it was the architect’s own drawing, the LLP does not help them. It never was intended to. Professional indemnity insurance and an LLP are complements, not alternatives: the LLP handles partner-versus-partner contagion, insurance handles your own mistakes.

LLP compared with a partnership and with a company

The obligations you take on

An LLP is lighter than a company and heavier than a general partnership. Five obligations do most of the work.

Two partners, always

Section 28(1) requires at least two partners. Section 28(2) contains a trap that is easy to fall into and expensive to discover: if the LLP carries on business with fewer than two partners for more than two years, a person who was a partner during that period and knew about it becomes personally liable, jointly and severally with the LLP, for obligations incurred after those two years. The limited liability in section 12 is expressly overridden. A two-partner LLP where one partner dies or resigns is therefore on a clock, and two years is shorter than it sounds when nobody is counting.

A manager ordinarily resident in Singapore

Section 29 requires at least one manager who is a natural person, at least 18, of full legal capacity, and ordinarily resident in Singapore, with particulars and consent to act lodged with the Registrar. The manager is answerable for the LLP doing what sections 30, 33 and 34 require, and is personally liable for penalties imposed on the LLP for breaching those sections unless the court is satisfied they should not be. That is a real personal exposure attaching to a role firms often hand to whoever is least busy.

The annual declaration of solvency

This is the LLP’s equivalent of the annual return, and it is the obligation most often missed.

Section 30(1) requires the LLP to lodge with the Registrar a declaration by one of its managers stating that, in that manager’s opinion, the LLP either does or does not appear as at that date to be able to pay its debts as they become due in the normal course of business.

The timing, in section 30(3): the first declaration is due not later than 15 months after registration, and after that once in every calendar year, at intervals of not more than 15 months. The Registrar may grant an extension on application under section 30(4).

The consequences of getting it wrong sit in the same section:

1. Failing to lodge in time. Section 30(5) makes the LLP guilty of an offence, liable on conviction to a fine not exceeding $5,000, with the enforcement provisions in the Fifth Schedule also engaged.
2. Declaring solvency without reasonable grounds. Section 30(6) makes a manager who so declares without reasonable grounds for that opinion guilty of an offence, liable on conviction to a fine not exceeding $5,000 or imprisonment for up to 12 months or both, where the manager is an individual.
3. Feeding the manager false information. Section 30(7) catches a person who gives a manager information that is false or misleading in a material particular, knowing or having reason to know it, with a fine not exceeding $10,000 or imprisonment for up to two years or both, for an individual.

Note what section 30(6) really demands. The declaration is an opinion, and the offence is holding it without reasonable grounds. A manager who signs without having looked at the numbers is exposed whether or not the LLP turns out to be solvent. Close the books before the declaration is due, not after.

Accounting records

Section 31 requires accounting and other records that sufficiently explain the transactions and financial position, and that enable profit and loss accounts and balance sheets giving a true and fair view to be prepared. Those records must be kept for at least five years from the end of the financial year in which the relevant transactions were completed, and be open at all times to inspection by the partners.

There is no obligation to lodge financial statements with the Registrar and no general audit requirement in the Act. That is a genuine saving, and it is also why LLP bookkeeping quietly deteriorates: nothing external forces the discipline. If you cannot produce a true and fair position on demand, you cannot support the solvency declaration either. Our note on when to move from DIY bookkeeping to professional support covers the tipping point.

Changes, names and controllers

Section 34 requires the LLP to lodge a statement within 14 days of the appointment of a new partner or manager, of a partner or manager ceasing to hold that position, or of a change in their lodged particulars.

Section 22 requires the name to include either the words “limited liability partnership” or the acronym “LLP”, with a fine not exceeding $5,000 for contravention. That is not cosmetic: it is how the outside world is put on notice of what it is dealing with. Part 6A of the Act also imposes a register of registrable controllers regime on LLPs, in parallel with the equivalent obligations for companies, and where a corporate service provider maintains yours the duties in our Corporate Service Providers Act 2024 compliance FAQ sit on top.

Tax: transparent, like a partnership

An LLP is tax transparent: it is not taxed at entity level, and each partner is taxed on their share, an individual at the resident individual rates and a corporate partner at the corporate rate. IRAS sets this out by partnership type, and the precedent partner files the partnership return so each share can be declared.

For a professional practice distributing most of its profit each year, that is often the point: no second layer, and no question of how to extract cash. For a business intending to retain and reinvest, it is a disadvantage, because partners are assessed whether or not the money was drawn.

Who an LLP actually suits

The structure was designed with professional practices in mind, and that remains where it fits best:

• Law firms, accounting firms, architecture and engineering practices, medical and consulting partnerships. Several principals, each doing their own work, each wanting protection from the others’ errors. ACRA’s recent practice direction on external capital in accounting firms is a reminder that professional-firm structures carry their own regulatory overlay.
• Joint ventures between two established businesses where each side contributes work rather than capital and neither wants exposure to the other’s conduct.
• Practices with fluid membership, where partners join and leave regularly and the perpetual succession in section 4(3) removes the need to reconstitute the firm each time.

It fits poorly if you want to raise equity (there are no shares to sell), if you intend to retain and reinvest profits rather than distribute them, if there is only one of you, or if you need the credibility a company carries with procurement teams and credit committees.

Converting into an LLP is provided for: section 26 covers conversion from a firm and section 27 conversion from a private company, each governed by a schedule to the Act. Converting out is not symmetrical, so treat the choice as reasonably durable.

If your business does not look like the list above, part 4 of this series covers the private limited company in depth and is forthcoming. The Companies Act 1967 deep-dive FAQ covers the company’s day-to-day obligations in the meantime.

What goes wrong with LLPs

The declaration of solvency is treated as a formality. A manager signs it because it is due, without the numbers being closed. Section 30(6) makes that a personal offence if there were no reasonable grounds for the opinion, and the exposure sits with the individual, not the LLP.

Nobody drafted the LLP agreement. Because section 10 disapplies partnership law, the internal position falls to the statutory defaults, and partners who assumed “the usual partnership rules” apply discover on the way out that they do not.

The LLP drops to one partner and the clock starts. Section 28(2) then reattaches personal liability, jointly and severally, to a partner who knew, for obligations incurred after the two-year mark.

Partners believe they are fully protected. They are protected from each other, not from their own negligence, and in a professional practice most claims concern somebody’s own work.

Records slip because nothing forces them. No filed accounts and no audit means no external deadline, until a bank, a claimant or a departing partner asks for a true and fair position.

Frequently asked questions

Is an LLP a separate legal entity in Singapore?
Yes. Section 4 of the Limited Liability Partnerships Act 2005 makes an LLP a body corporate with legal personality separate from its partners and with perpetual succession. It can own property, enter contracts, and sue and be sued in its own name, and a change of partners does not affect its existence.

Are LLP partners personally liable for anything?
Yes, for their own wrongful acts. Section 12(3) preserves a partner’s personal liability in tort for their own wrongful act or omission, while removing liability for another partner’s. Obligations of the LLP itself are solely the LLP’s under section 12(1), to be met out of the LLP’s property.

What is the annual declaration of solvency, and when is it due?
It is a declaration lodged with the Registrar by one of the LLP’s managers stating whether, in their opinion, the LLP appears able to pay its debts as they fall due. Under section 30(3) the first is due not later than 15 months after registration, then once each calendar year at intervals of not more than 15 months.

Does an LLP need to be audited or file accounts with ACRA?
No. The Limited Liability Partnerships Act 2005 contains no general statutory audit requirement and no obligation to lodge financial statements. Section 31 still requires accounting records sufficient to give a true and fair view, kept for at least five years and open to inspection by the partners.

How is an LLP taxed in Singapore?
An LLP is tax transparent, so it pays no tax at entity level. Each partner is taxed on their share of the income: individual partners at the resident individual rates, corporate partners at the corporate rate. The precedent partner files the partnership return so each partner can declare their share.

Can an LLP have only one partner?
Not for long. Section 28(1) requires at least two partners. If an LLP carries on business with fewer than two for more than two years, section 28(2) makes a partner who knew of it personally liable, jointly and severally with the LLP, for obligations incurred after that two-year period.

Running an LLP properly is a calendar problem

Most LLPs that get into trouble did not choose the wrong structure. They chose a reasonable one and then let the solvency declaration, the two-partner rule and the 14-day change filings drift, because nothing in an LLP’s ordinary week reminds anybody they exist.

Raffles Corporate Services administers LLPs alongside companies: we keep the declaration of solvency on a schedule, close the records so the manager signing it has grounds to, lodge partner and manager changes inside the 14-day window, and flag the two-partner problem before it becomes a liability problem. If you are not certain when your next declaration is due, that is a short conversation.

The rest of the series: the comparison of all five structures, the sole proprietorship and partnership in depth, and the private limited company, forthcoming. More on Singapore corporate secretarial practice at Singapore Secretary Services.

The Editorial Team, Raffles Corporate Services