Limited Partnership — a business structure in Singapore that provides partners with different liabilities: one is a general partner and the other is limited (or dormant) partner. The role of the limited partner is often restricted to funding. Setting up a limited partnership can be an alternative to incorporating a company.
What are the advantages of a Limited Partnership?
A Limited Partnership allows you to have partners with different forms of involvement in the business. Usually, the general partner runs the business while the limited partner has his role restricted to his or her investment in the business. It protects the limited partner from the financial risks, and secures the management and decision-making role of the general partner.
What you need to know about Limited Partnership
The Limited Partnership provides a solution to involving investors. However, setting up an LLC with shareholder structure is a simpler way to go. The dividends are not taxed in Singapore, and the legal entity means there’s limited liability for both parties.
Limited Partnership examples in Singapore
You’ve decided to start your online cupcake shop. You will make the cupcakes yourself in your kitchen, you don’t need any employees. However, you have two friends who are willing to invest some money in your idea. They will not have any say in how you run, develop, and direct your business.