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1. The Ministry of Finance conducted a public consultation
exercise to seek comments on the draft
Limited Partnerships (LPs) Bill 2006 as well as
the proposed related amendments to the Business Registration
Act (“BR
Act”), the Goods and Services Tax Act (“
GSTA”)
and the Income Tax Act (“ITA”).
2. In 2002, the Company Legislation and Regulatory
Framework Committee (CLRFC) recommended enacting legislation
to introduce Limited Liability Partnerships (LLPs) and
Limited Partnerships (LPs) in Singapore, so as to provide
local and foreign investors in Singapore greater flexibility
in business structures. The LLP Act was passed by Parliament
on 25 January 2005 and brought into operation on 11
April 2005.
3. The Government has now accepted the recommendations
contained in the final
report by a private-sector study team on LPs. Among
the areas covered by the report are the legal structure,
registration requirements, disclosure and reporting
requirements, the liability of partners, and the dissolution
requirements of LPs. A new legislation, namely the Limited
Partnerships Act, will be enacted to effect the study
team’s recommendations.
4. A LP is a structure comprising at least one general
partner with unlimited liability and limited partners
with limited liability. A LP is essentially a general
partnership, but with passive investors in the form
of limited partners. While the limited partners enjoy
limited liabilities, they are prohibited from participating
in the management of the LP.
5. The LP structure is common in other countries such
as the United Kingdom and the United States. While the
Singapore LP structure will be made available to most
businesses and professions, it is most likely to appeal
to niche markets like the private equity and fund investment
businesses.
6. The LP Bill seeks to effect the recommendations
of the study team and would cover the following areas:
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a.
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Definition and constitution of limited partnership; |
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b. |
Law as to private partnerships to apply where
not excluded by this Act; |
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c. |
Default rules on relationship of partners
inter se; |
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d. |
Limited partner not to take part in management
of firm; |
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e. |
Distributions to limited partner; |
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f. |
Dissolution of limited partnership; |
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g. |
Accounts and audit; and |
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h. |
Registration under the Business Registration
Act |
7. Besides introducing the new LP
Bill, related amendments would also have to be made
the BR
Act (to cater for the registration of LPs), the
GSTA
and the ITA
(to cater for the tax treatment of LPs). The explanation
for the proposed amendments to the GSTA and the ITA
in relation to LPs can be found in the summary
table for GSTA and summary
table for ITA respectively.
8. In addition to seeking comments on the draft bills,
MOF also sought specific feedback on the following issues
relating to the proposed amendments to the BR Act and
the LP Bill 2006. The list of issues can be found here.
9. The draft legislation released here is only for
the purpose of consultation and should therefore not
be used for individual or business decisions as it does
not represent the final legislation or regulations.
All comments received during the consultation exercise
will be reviewed thoroughly and, if accepted, will be
incorporated in the Bill for introduction in Parliament.
10. The public consultation was held from 2 August
2006 to 8 September 2006. We are sorry that comments
after the deadline will not be considered
11. For your convenience, the relevant documents related
to this public consultation exercise can be downloaded
for further reference. Please click here.
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