Business partnerships can come in many shapes and sizes – from a business owner deciding to start their own business with a single partner, to a partnership of multiple members with shared decision-making. But what are the different forms of partnerships, and which ones should be used for your business? In this article, you’ll find that there is no “one size fits all” answer to this question.
What is Partnership?
Partnership is a business relationship between two or more people, firms, or organizations that involve joint operation and share profits. In Singapore, Partnership is defined under the Business Corporation Act (Cap. 353) as follows:
“A partnership is an association of two or more persons who carry on business together with a common object in such a way that they are jointly responsible for its success or failure.”
Generally speaking, there are three types of partnerships in Singapore – general partnership, limited partnership and company limited partnership.
General Partnership is the most common form of partnership in Singapore as it offers the least protection to partners against each other’s liabilities. Limited Partnerships provide greater protection than General Partnerships but at the expense of increased legal costs and administrative burdens. Company Limited Partnerships offer the highest level of protection against partners’ liabilities but also increase the cost of setting up and running a business.
What is Limited Partnership?
Limited partnerships are a type of business entity that is registered with the Singapore government. They are similar to partnerships, but have some important differences. For example, limited partnerships can have more than one partner, whereas partnership entities can only have one partner. Limited partnerships also have greater flexibility in terms of their organizational structure and business operation. This is because they do not need to adhere to some of the stricter rules that apply to partnerships.
One important thing to note about limited partnerships is that they are not always available as an option for businesses. It is important to consult with an experienced lawyer if you are interested in setting up a limited partnership in Singapore. This is because there are a number oflegal considerations that must be taken into account when setting up a limited partnership.
Differences between Partnership and Limited Partnership?
The two most common business structures in Singapore are partnership & limited partnership. The main differences between these two structures are as follows:
1) A partnership is a type of unincorporated association, while a limited partnership is an incorporated entity. A partnership has no legal personality and cannot sue or be sued. It can only make contracts and agreements on its own behalf. A limited partnership, on the other hand, is an incorporated entity with legal personality. It can sue and be sued, make contracts and agreements on its own behalf and also have shareholders.
2) Contributions to a partnership are shared equally among all members, while contributions to a limited partnership are divided among the partners according to their respective shares in the company. This means that a partner in a partnership who contributes more capital will have a greater say in how the business is run than a partner who contributes less capital.
3) Partnerships can exist for any period of time, while limited partnerships must have at least one year of operating history before they can apply for registration with the relevant authorities.
4) There is no limit to the number of partnerships that can be formed under Singapore law, but there is a limit of three registered limited partnerships per person (or body corporate).