A Closer Look At A Partnership As A Business Type
A partnership is a type of business owned by two or more individuals who are working together to acquire profit from the business.
The number of partners in a partnership could range from two to 20 (those with 20 partners need to be incorporated as a company by virtue of the Companies Act Chapter 50).
Like the sole proprietorship, which is owned by just one person, a partnership is not considered a separate legal entity. Partners also have unlimited liability on the partnership’s affairs. This means that partners can be held personally liable for any issues the partnership involves itself in, particularly its debts and losses. This also means that the partnership can be sued in its name (and likewise, can sue others using its name). However, a partnership cannot own a property using its business name.
Like the sole proprietorship, a partnership is open to potential owners above 18 years of age, are either Singapore citizens, Permanent Residents (PR), or bearers of Employment Pass or Dependent Pass. Likewise, an owner who does not reside in Singapore has to appoint someone who does (and fulfills the above mentioned requirements) to act as a local manager. Self-employed individuals looking into becoming a partner have to top up their Medisave account with the CPF board.
The partnership requires a setup fee of S$65 just like the sole proprietorship (S$15 for the application fee and S$50 for registration fee). Any income of the partnership will be accounted for and taxed at each of the partners’ personal income tax rates as well.
The partnership also lives by the partnership agreement set forth by the partners, violation of which will result in the dissolution of the partnership as a business entity. The Accounting and Corporate Regulatory Authority (ACRA), which regulates businesses in Singapore, can also revoke the registration of a partnership when it fails to abide by rules, such as that of renewal of registration.