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.

BRIEF DESCRIPTION OF THE LP 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.

BILLS FOR CONSULTATION

6. The LP Bill seeks to effect the recommendations of the study team and would cover the following areas:

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.

SPECIFIC ISSUES FOR COMMENTS

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.

PERIOD OF CONSULTATION

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

DOCUMENTS TO DOWNLOAD

11. For your convenience, the relevant documents related to this public consultation exercise can be downloaded for further reference.

To read content in Microsoft Word format, you will need Microsoft Word. If you do not already have Microsoft word, click here to download the Microsoft Word Viewer for free.