Short answer: A partnership agreement in Singapore is a private contract between partners that sets profit shares, capital, decision-making, exit and dissolution terms. Without one, the Partnership Act 1890 fills the gaps: equal profit shares, no partner salaries, unanimous consent to admit a partner, and any partner can end an open-ended partnership by notice.
A general partnership registered with ACRA has no constitution and no board, so the partnership agreement in Singapore is the only document that records how the partners have agreed to run the business. Without one, the Partnership Act 1890, an English statute applied in Singapore, decides for them, and its defaults rarely match what partners assume.
Key facts at a glance
- A general partnership needs at least 2 partners and, for a business carried on for gain, no more than 20 (Companies Act 1967, s 17(3)); certain regulated professional partnerships are exempt (s 17(4)).
- Without an agreement, partners share capital and profits equally and bear losses equally (Partnership Act 1890, s 24(a)).
- No partner is entitled to a salary, and no new partner can join without the consent of all existing partners (s 24(f) and (g)).
- A partnership for an undefined time ends when any partner gives notice to dissolve (s 32(1)(c)), and on the death or bankruptcy of any partner (s 33(1)), unless the agreement says otherwise.
- Partners are jointly liable for the firm’s debts (s 9) and jointly and severally liable for its wrongs (s 12), with no cap.
- The partnership itself pays no income tax. The precedent partner e-files Form P between 1 February and 18 April, and each partner is taxed on their share at individual rates.
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.
What is a general partnership in Singapore, and is a written agreement required?
A general partnership is two or more persons carrying on a business in common with a view of profit (Partnership Act 1890, s 1(1)), registered with ACRA under the Business Names Registration Act 2014. No law requires a written partnership agreement, but without one the statutory defaults apply.
ACRA’s registration guidance requires at least two partners and caps a general partnership at 20. That cap comes from section 17(3) of the Companies Act 1967, which bars any partnership of more than 20 persons formed to carry on business for gain unless it is registered as a company or formed under another written law. Section 17(4) exempts partnerships of professionals whose calling is regulated by statute, such as law or architecture firms. Partners can be individuals or companies, and if all partners live overseas, one ordinarily resident authorised representative must be appointed.
A partnership is not a separate legal entity, so the agreement is the only place the partners’ private bargain is written down. For the cost of registering and renewing, see our guide to ACRA fees for a sole proprietorship or partnership.
What does the Partnership Act 1890 decide if you have no partnership agreement?
Section 24 of the Partnership Act 1890 sets nine default rules that govern the partners’ rights and duties “subject to any agreement express or implied”. If you have not agreed otherwise, these rules apply in full.
| Issue | Default rule if there is no agreement | Section |
|---|---|---|
| Profit and loss | Equal shares of capital and profits; losses borne equally, regardless of who contributed more | s 24(a) |
| Interest on capital | None before profits are ascertained | s 24(d) |
| Extra advances | Advances beyond agreed capital earn interest at 5% a year | s 24(c) |
| Salary | No partner is entitled to remuneration for working in the business | s 24(f) |
| Management | Every partner may take part in managing the business | s 24(e) |
| Ordinary decisions | Majority of partners | s 24(h) |
| Changing the nature of the business | Consent of all partners | s 24(h) |
| New partners | Consent of all existing partners | s 24(g) |
| Books | Kept at the principal place of business; every partner may inspect and copy them | s 24(i) |
| Expulsion | Not possible by any majority unless expressly agreed | s 25 |
| Ending the partnership | Any partner may dissolve an open-ended partnership by notice | ss 26 and 32 |
Two rules cause most disputes. Equal sharing means a partner who contributed most of the capital and works full time takes the same profit share as one who did neither. Dissolution at will means one partner can end an open-ended partnership by notice, forcing a wind-up unless the agreement provides a buy-out. The Act also gives every partner the power to bind the firm in the ordinary course of business (s 5), so internal limits on authority only bind outsiders who know about them (s 8).
What should a partnership agreement in Singapore include?
A good agreement replaces each default you disagree with and adds the mechanics the Act does not provide, especially for exit and valuation. Any term can later be varied by the consent of all partners (s 19).
| Clause | What to decide | Default it replaces |
|---|---|---|
| Parties, firm name and business | Registered business name, scope of business, place of business | None (scope matters for s 24(h) and s 30) |
| Term | Fixed term, single venture, or open-ended with a notice period | Dissolution by notice at any time (s 32(1)(c)) |
| Capital | Each partner’s contribution, timing, and treatment of further advances | Equal capital share (s 24(a)); 5% on advances (s 24(c)) |
| Profit and loss ratio | Sharing ratio, interest on capital, drawings policy | Equal shares, no interest (s 24(a), (d)) |
| Partner salaries | Fixed allocations for working partners | No remuneration (s 24(f)) |
| Management and authority | Who signs contracts and cheques, spending limits, reserved matters needing unanimity | Every partner manages; majority rules (s 24(e), (h)) |
| Precedent partner and accounts | Who keeps the books and files Form P; financial year end | Duty to render true accounts (s 28) |
| Admission of partners | Voting threshold and capital required from a new partner | Unanimous consent (s 24(g)) |
| Restrictive covenants | Non-compete and confidentiality during and after the partnership | Account for profits of competing business (s 30) |
| Retirement and expulsion | Notice period, grounds for expulsion, valuation of the outgoing share | No expulsion (s 25); retirement by notice (s 26) |
| Death, bankruptcy and incapacity | Continuation of the firm and purchase of the affected share | Automatic dissolution (s 33(1)) |
| Dispute resolution | Escalation, mediation or arbitration before court | Court dissolution (s 35) |
The valuation clause deserves particular care. Without an agreed formula and payment schedule, an outgoing partner’s share is a debt arising at the date of dissolution or death (s 43), and if the continuing partners keep using the outgoing partner’s share without settling, the outgoing partner can claim either a share of later profits or interest at 5% a year (s 42). A buy-out option in the agreement, properly exercised, cuts off that claim.
How liable are partners for each other’s actions?
Fully and personally. Every partner is liable jointly with the others for all debts and obligations of the firm incurred while they are a partner (s 9), and jointly and severally for wrongs committed by a co-partner in the ordinary course of business (ss 10 to 12).
A partnership agreement cannot change this as against outsiders. What it can do is set indemnities between the partners, so a partner who pays more than their share can recover from the others, and limit who can commit the firm. Two further points catch people out:
- A partner who retires remains liable for debts incurred before retirement, unless the creditors agree to release them (s 17(2) and (3)).
- A person dealing with the firm can treat everyone who appeared to be a partner as still a partner until they have notice of the change (s 36(1)). Notify customers and suppliers, and update ACRA, when a partner leaves.
For a fuller explanation of what unlimited liability means in practice, see sole proprietorship and partnership: what unlimited liability actually costs you.
How does a partner leave, and how is a partnership dissolved?
Under the Act, a partnership ends by expiry of its term, completion of its venture, notice in an open-ended partnership, death or bankruptcy of a partner, illegality, or a court order. The agreement can replace most of these with a continuation and buy-out mechanism.
Where the business is wound up, section 44 sets the order in which assets are applied, subject to any agreement:
- Pay the firm’s debts and liabilities to outside creditors.
- Repay each partner’s advances (loans to the firm, as distinct from capital).
- Repay each partner’s capital.
- Divide any surplus in the profit-sharing ratio.
Losses, including capital shortfalls, are met first from profits, then from capital, and finally by the partners personally in their profit-sharing ratio (s 44(a)). After dissolution, each partner keeps authority to bind the firm only so far as needed to wind up its affairs (s 38).
A partner can also apply to court for dissolution on grounds such as a co-partner’s permanent incapacity, persistent breach of the agreement, the business running only at a loss, or where it is just and equitable (s 35). Court proceedings are conducted by a Singapore Advocate and Solicitor; if you are heading that way, speak to a lawyer early. The ACRA side, cessation of the business name and the final tax filings, is covered in our guide to closing a sole proprietorship or partnership.
How are partnerships taxed in Singapore?
The partnership does not pay income tax itself. Each partner reports their share of the partnership’s profit as business income in their own Form B or B1 and is taxed at individual income tax rates.
The precedent partner, the partner responsible for the firm’s tax matters, files the Partnership Income Tax Return (Form P). IRAS’s basic guide for partnerships states that e-filing of Form P is available from 1 February and due on 18 April, and that e-filing is compulsory from Year of Assessment 2027. If Form P is filed by 28 February, each partner’s allocation is pre-filled in their own return. Partnerships with revenue of S$200,000 or less file a 2-line statement; larger ones file a 4-line statement.
The agreement drives the tax figures. IRAS computes divisible profit as adjusted profit less partners’ salaries, allowances, bonuses, CPF contributions and interest on capital, and the precedent partner then allocates it to partners. Salaries to partners are therefore an allocation of profit, not a deductible expense. Objections to the allocation must go through the precedent partner within 30 days of the notice of allocation. Name the precedent partner and the profit-sharing ratio in the agreement so the tax return matches it.
When should a partnership become an LLP or a Pte Ltd?
Consider moving when personal exposure to the firm’s debts becomes a real risk, when you want to bring in more than 20 owners, or when profits are high enough that corporate tax rates and retained earnings make sense.
- A limited liability partnership is a body corporate with legal personality separate from its partners (Limited Liability Partnerships Act 2005, s 4). See converting to an LLP in Singapore.
- A private limited company separates ownership from management, uses a constitution and shareholders’ agreement in place of a partnership agreement, and is taxed at the corporate rate. There is no direct conversion from an LLP to a company, so the business is transferred; see converting an LLP to a Pte Ltd.
Our Incorporation of Company Package is S$450, one time, as published on our packages page; incorporation is usually completed within 1 business day of receiving complete documents, subject to compliance checks. Our free tools can help you compare structures before you decide.
Frequently asked questions
Does a partnership agreement need to be registered with ACRA?
No. ACRA registers the partnership, its business name and its partners under the Business Names Registration Act 2014. The partnership agreement is a private contract and is not filed.
Can partners share profits unequally without a written agreement?
Yes, if the agreement can be shown from the partners’ conduct, because section 24 applies subject to any agreement “express or implied”. Proving an implied agreement is difficult, so put the ratio in writing.
What happens to the partnership when a partner dies?
Unless the agreement provides otherwise, the death of any partner dissolves the partnership as regards all partners (s 33(1)). The deceased partner’s share becomes a debt owed to their estate as at the date of death (s 43).
Can we change the partnership agreement later?
Yes. The partners’ mutual rights and duties can be varied by the consent of all partners, given expressly or inferred from a course of dealing (s 19). Record any change in a signed variation.
Need help with this?
Raffles Corporate Services can handle the ACRA filings, compliance documentation and records for you, and where court proceedings or legal advice are needed, we work with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice.
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Last reviewed: 2 November 2026. The Editorial Team, Raffles Corporate Services.