Private company, LLP or LP in Singapore?

A private company is usually the clearest choice when founders want limited shareholder liability, shares for investment and a structure that can grow. An LLP can suit two or more active professionals who want partnership flexibility with a separate legal entity. An LP is more specialised: at least one general partner manages the business with unlimited liability, while limited partners contribute capital without taking part in management.

The right answer depends on who will own the venture, who will manage it, how profits should be taxed and whether outside investment is likely. Registration cost alone is a poor basis for choosing because changing structure later can affect contracts, licences, tax, employees and ownership.

Compare the legal position first

Question	Private company	LLP	LP
Separate legal entity?	Yes	Yes	No
Minimum owners?	One shareholder	Two partners	One general and one limited partner
Main liability position	Members generally have limited liability	Partners generally are not liable for another partner’s wrongdoing	General partner has unlimited liability; limited partner’s liability is capped subject to the law
Who manages?	Directors manage under the constitution and Companies Act	Partners decide under the LLP agreement	General partner manages; limited partner must avoid management
Income tax approach	Company pays corporate income tax	Tax transparent, with partners taxed on their shares	Tax transparent, with partners taxed on their shares

When a private company fits

ACRA’s current business structure guide describes a company as a separate legal entity with the strongest separation between business debts and shareholders’ personal assets among the common choices. Shares make it easier to record ownership percentages, issue new equity and transfer an interest, subject to the constitution and shareholders’ agreement.

A company has more formal duties. It needs at least one director who meets the local residence requirement, a registered office, a company secretary within the statutory period, accounting records and annual filings. Depending on the facts, it may also need audited financial statements and an annual general meeting. Directors have their own legal duties even where a corporate service provider handles filings.

IRAS states that companies are taxed at 17 per cent of chargeable income, with exemptions, rebates and deductions applying only where their conditions are met. For Year of Assessment 2026, IRAS also describes the current corporate income tax rebate. Tax should be modelled using the expected profit, remuneration, distributions and owner circumstances rather than the headline rate alone.

When an LLP fits

An LLP is a body corporate and separate legal entity. ACRA states that it needs at least two partners and at least one locally resident manager. Partners can be individuals or corporate bodies, and the LLP continues until it is struck off or wound up.

The usual attraction is flexibility between active partners. The LLP agreement can set profit shares, decision rights, contributions, admission, retirement and dispute arrangements. A partner is generally protected from debts caused by another partner, but remains liable for personal wrongful acts. The agreement and professional liability cover therefore matter.

IRAS’s LLP tax guide treats an LLP as tax transparent. The LLP computes its income, but each partner is taxed on an allocated share according to the partner’s own tax status. Special rules can restrict an individual’s use of deductions and losses. A founder comparing an LLP with a company should model both the entity position and the partners’ positions.

When an LP fits

An LP has at least one general partner and one limited partner. It is not a separate legal entity. The general partner manages the business and carries unlimited liability for the LP’s debts. A limited partner’s liability is generally limited to the agreed contribution, but that person must not take part in management in a way that changes the legal protection.

This division can suit investment arrangements where capital providers do not manage the venture. It is usually a poor fit when every founder expects equal management rights. The general partner is often structured as a company, but that does not remove the need to analyse contracts, governance and regulatory duties.

IRAS’s LP tax guide explains that LPs are tax transparent like LLPs and general partnerships. General and limited partners are taxed on their shares, with specific restrictions applying to limited partners’ deductions. Fund or investment activity may also raise licensing, offering and incentive questions that entity registration does not settle.

Use five questions to decide

Will ownership be represented by shares, active partnership rights or passive capital interests?
Who needs authority to bind the venture, and whose personal assets could be exposed?
Will the venture bring in investors, issue employee equity or seek a future sale?
Should income be taxed in an entity or allocated to partners?
What annual filings, accounts, audit, licences and internal approvals will the team maintain?

For example, two architects may value an LLP because both will practise and share profits, while a technology start-up expecting several funding rounds will usually find shares and company governance easier. A private investment arrangement with one manager and several passive investors may consider an LP, subject to fund and securities rules.

Where the choice turns on a partnership agreement, shareholder rights, professional liability or regulation, obtain Singapore legal advice. Raffles Consulting Services coordinates with law firms in the relevant speciality. Our affiliated company, Raffles Corporate Services Pte Ltd, handles incorporation and registration work after the structure has been selected.

Before filing, compare the choice with the foreign company entry routes and the business licence checks. The broader sequence is set out in our Singapore Market Entry and Domiciliation hub.