Public Feedback Sought For Draft Limited Partnerships Bill 2006

1. The Ministry of Finance is conducting a public consultation exercise to seek public comments on the draft Limited Partnerships (LPs) Bill 2006, as well as the proposed related amendments to the Business Registration Act, the Goods and Services Tax Act and the Income Tax Act.

Background

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. (A copy of the study team's report on LPs is attached as Annex.) 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.

Brief Description of the Limited Partnership Structure

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.

Public Consultation

6. The Ministry of Finance invites interested parties to provide comments on the draft Limited Partnership Bill 2006 as well as the proposed related amendments to the Business Registration Act, the Goods and Services Tax Act and the Income Tax Act. Copies of the draft Bills can be downloaded from our website at http://www.mof.gov.sg. Respondents may send in their comments via email to MOF_LP_LLP@mof.gov.sg or via fax to 6337 4134. The Ministry requests that all comments be submitted by 8 September 2006.

MINISTRY OF FINANCE