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SINGAPORE : The Parliament of Singapore has passed the Limited Partnerships Bill, which seeks to introduce a new business structure in the city-state.
Limited partnerships (LP) are useful in "labour-capital" partnerships, where one or more financial backers prefer to contribute money or resources while the other partner performs the actual work.
Senior Minister of State of Finance Lim Hwee Hua said such partnerships will enable Singapore to better meet the diverse business needs, and offer entrepreneurs and investors an additional form of business structure to choose from.
Under the bill, every LP will have at least one general partner, and one limited partner at the point of registration.
The LP and its partners must be registered with the Accounting and Corporate Regulatory Authority.
The general partners of an LP are in the same legal position as partners in a conventional partnership. They have management control and have joint and several liabilities for the debts of the LP.
The partners' liability is limited to the extent of their investment in the LP. They cannot participate in management; otherwise, they would lose their limited liability protection.
Given that an LP is not a separate legal entity, the tax treatment of the LP for income tax and GST purposes would follow the tax treatment of general partnerships.
While an LP is not required to file its accounts or have them audited, they are required to keep proper accounting records that will enable true and fair financial statements to be prepared and audited if deemed necessary.
Mrs Lim said: "The creation of the LP business vehicle... is consistent with our overall policy to make Singapore a conducive place for business." - CNA /ls
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