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Limited Liability Partnerships |
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Monday, 13 June 2011 04:35
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A limited liability partnership is a partnership in which some or all partners have limited liability, hence one partner is not liable for another partner’s misconduct or negligence. This allows a limited liability partnership to exhibit characteristics similar to a private company and protects members from personal liability, except to the extent of their investment in the Limited Liability Partnership.
Limited Liability Partnerships are not a separate entity for income tax purposes hence profits and losses are passed through directly to the partners.
Key Operational Requirements
- A Labuan Limited Liability Partnership shall have a registered office in Labuan, which may be the registered office of a Labuan trust company.
- Both individual and corporation may be a partner in a Labuan Limited Liability Partnership. The minimum number of partners to form a Labuan Limited Liability Partnership is two persons.
- A Labuan Limited Partnership or a Labuan company may be converted into a Labuan Limited Liability Partnership subject to statutory provisions. The obligations, contracts, and employment agreements entered into prior to it’s conversion shall continue and the liability of the partners for the existing liabilities shall also continue as in their prior capacity as a partner in a Labuan Limited Partnership or a shareholder in a Labuan company.
- A Limited Liability Partnership must have at least one "general partner" with unlimited liability.
- A Limited Liability Partnership has a legal personality separate from its partners. It can hold assets in its own name, sue and be sued in its own name.
- A Limited Liability Partnership has perpetual succession in the sense that any change in its partners will not affect its existence, right and liabilities.
- The relationship between the partners in an Limited Liability Partnership is determined according to the partnership agreement.
- Partners are considered agents of the Limited Liability Partnership and their actions bind the Limited Liability Partnership unless the partner has no authority to bind the Limited Liability Partnership and a third party dealing with the partner knows of his lack of authority;
- A Limited Liability Partnership is required to keep proper accounting records but auditing and filing of accounts with the authority is not required. However, a Labuan Limited Liability Partnership is required to submit an annual solvency certificate with Labuan FSA on or before its anniversary of registration.
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Last Updated on Friday, 30 March 2012 00:45
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