Lower cost is one of the benefits, as there is no need to do audited accounts etc. However, there may be disadvantages as well and one may have to think through more carefully whether one should trade or do business with an LLP since it has limited liability.
It is administratively easy to convert online, but the internal conversion process within the company may be simple or complex depending on the size of the entity that wishes to convert.
Yes, the decision lies with the shareholders.
No, because there is only one shareholder. LLP would need to have at least 2 partners. However, if the number of shareholders in the wholly owned subsidiary is increased to 2 or more shareholders, conversion would then be possible.
Under the LLP Act, a partner of a LLP shall cease to be a partner of a LLP upon the death of the said partner.
Where this happens, unless otherwise provided in the LLP agreement, his personal representative or liquidator (as the case may be) shall be entitled to receive from the LLP an amount equal to the former partners capital contribution to the LLP and his right to share in the accumulated profits of the LLP after deduction of losses of the LLP and determined at the date the deceased partner ceased to be a partner. The personal representative or liquidator shall have no right to interfere in the management of the LLP.
The LLP introduces a business structure that combines the advantage of the flexibility to run it like a partnership of two or more owners with limited liability accorded to the partners. It is not meant to apply to a sole proprietor. If the concept to a Limited Liability Sole Proprietorship is expanded, it will have far reaching implications on our legal framework for business structures. This is also not consistent with leading jurisdictions currently. A regulatory framework of an one director company differs from that of the LLP too.
The LLP Act does not restrict any professional practices from registering as a LLP. However professional practices have to check against their legislation regulating their respective professions to ensure that this is allowed.
Currently, there is no provision for the conversion from a LLP back to a Company.
Only Singapore citizens and PRs are required to meet the minimum medisave paid-up requirement. For more details, pls refer to http://www.cpf.gov.sg/
There is no corporate tax rate for LLPs. For further details, we advise members to seek clarifications from IRAS directly.
ACRA does not handle taxation issue, please refer to www.iras.gov.sg or seek clarifications with IRAS directly.
The LLP legislation does not prescribe the accounting standards to be used. The LLP Act mandates proper record keeping of accounts to enable the true and fair view of accounts to be presented. We think LLPs would apply Singapore FRS, unless there are exceptional reasons to rely on a foreign accounting standard.
The current regulation is that as long as there are no outstanding charges, conversion is possible if the relevant requirements are met. Even after the conversion date, the partners continue to be liable for all the liabilities incurred by the partnership before the conversion date. Any liabilities incurred after the conversion shall be borne by the LLP.
All the liabilities will be frozen and retained at the point of conversion into LLP. The creditors can still sue the partners or they can choose to sue the LLP.
This will depend on the internal agreements between the newly converted partners and would most probably be reflected in the LLP agreement.
It is up to the creditors to decide what they want to do with regards to the debts that are owed to them by the LLP.
Our records will be updated to capture this information. It is up to the creditors to decide what they want to do with regards to the debts that are owed to them by the LLP.