LLP Vs. LLC in Singapore: Which one is better?

1. LLP Vs. LLC in Singapore: Which one is better?

2. As there are multiple types of company incorporation in Singapore, you may find it cumbersome to choose the right company structure which suits your business as there are many similarities between the types of company structures, where each type has its own distinct features/benefits. Two of the most common company incorporation types in Singapore are limited liability company (LLC or also known as a private limited company) and limited liability partnership (LLP).

3. As limited liability companies or private limited companies in Singapore are limited by shares, this means that the shareholders are not liable for its debts or losses beyond the amount of share capital they have invested in the company. The personal wealth and personal assets are not at risk as they are protected, by the definition of a limited liability. It is also a separate legal entity which means it will still be subjected to taxation.

4. The choice of company type has the potential to affect the tax rates and statutory compliance that will become applicable to the proposed business entity after the registration. It may also impose restrictions on the ability of the business to raise capital for the future expansion of its business activities and hence it is imperative to make an informed decision on the choice of company structure for your venture.

5. The ease of raising funds A Singapore private limited company (LLC) is viewed as being more trusted and credible by banks and various financial institutes, therefore raising funds for a Singapore private limited company is relatively easier.   In a case of an LLP, it usually has to remain dependent on private finances and partner’s contributions.

6. The ease of transferring ownership In the case of a transfer of ownership, transferring partial or full ownership in an LLC is easy and can be done by simple transfer of shares. For transfer of ownership in an LLP, it cannot be sold as a whole. The owners have to individually sell each of the assets, licenses, and permits.

7. The different tax treatments for both types of entities In LLP, profits are distributed among the partners and they are taxed at the personal income tax rate while in LLC, the company’s revenues are taxed at the country’s corporate tax rate that is capped at 17% of the company’s  chargeable income.

8. The appropriateness for different industries While there’s nothing of such nature defined in laws, LLP in Singapore is generally more suitable for individual professionals coming together such as lawyers, accountants and consultants. A private limited company in Singapore, on the other hand, is the best suited for entrepreneurs, particularly those looking to do long-term business.

9. LLC (private limited company) is the most powerful business structure in Singapore as a major proportion of company incorporation in Singapore are in the form of Singapore private limited companies. If you are looking at easy incorporation procedure, lower tax rates, ability to raise funds and better credibility, choosing LLC as a business structure is often a wise choice and we can help you in easily incorporating your company in Singapore by providing end-to-end support that you would need.

10. Precursor has years of hands-on experience, a track record of working with some of the world’s famous multinationals and award winning team of local experts who deeply care in serving the needs of our clients at all stages, right from knowledge dissemination to consultancy, support and a full suite of corporate services.

11. For More information visit this link: http://precursor.com.sg/llp-vs-llc-singapore-one-better/

12. Contact us: Precursor Group Pte ltd. • Address : 60 Albert Street #14-04 OG Albert Complex Singapore (189969) • Phone : (65) 63365500 • Email id : clients@precursor.com.sg • Website : http://precursor.com.sg