How to Form a General Partnership in Singapore

What Is a General Partnership?

Before going into detail about General Partnerships, let's break down the word Partnership itself. In Singapore, when two or more interested parties get together to form a business and produce profit, a Partnership can be formed. The maximum number of partners in a General Partnership is 20. The parties involved are known as partners.

Unlike other legal entities, Partnerships are ruled by the Partnership Act, which is different from the Limited Partnership Act, in which the conduct of a Limited Partnership is regulated.

A Partnership agreement is the essential document that you must prepare to form a Partnership in any of its forms. Why do you need this agreement? It lets you start your business on the same level as your partners. The agreement establishes who is who, the tasks, the share of profits and losses, and the personal liability of each partner.

In a General Partnership, all the partners have unlimited liability. In a Limited Partnership, a limited partner is only responsible for the amount they contributed.

Key Features of a General Partnership

• No separate legal personality. The General Partnership is not a separate legal entity from its founders. Partners and the business are legally the same.
• Personal exposure. Partners expose their personal assets. Any debt the business takes on falls on the partners.
• Pass-through taxation. The partnership is not subject to corporate tax in Singapore. Profits are taxed as personal income for each partner.
• 2 to 20 partners. A General Partnership requires at least 2 partners and is capped at 20. Beyond 20, the business must incorporate as a company.
• Simple to set up. Registration through Bizfile takes 1 business day in most cases, with low setup costs.
• Renewal required. A General Partnership is valid for 1 or 3 years and must be renewed before expiry.

Types of Partnerships in Singapore

Singapore recognises three main types of partnerships, each with different rules on liability, governance, and tax. Picking the right one depends on how much protection you need and how complex your business is.

If you want partnership flexibility with limited liability and a separate legal entity, the LLP is the modern option. If you want full liability protection plus access to corporate tax exemptions, the private limited company is usually the better route. 

What Is Required Before Registering a General Partnership?

General Partnerships in Singapore have a simple nature, but there are still a few conditions to create one. For example, if an individual wants to become a partner, they need to be 18 years old. Residents and people with a valid visa can become partners. Foreigners and foreign companies can form a partnership too.

Documents and Information Needed

• A unique business name
• A copy of each partner's identity documents (Singapore ID or passport)
• Residential address proof for each partner
• A physical Singapore address to register the business
• A non-disqualification declaration from the appointed manager (if not a partner)
• A signed partnership agreement that sets out roles, profit sharing, and decision-making rules
• A signed compliance declaration from all the partners

As the partners will be the ones running the business, most of the documentation needed relates to their personal details. Defining roles and tasks upfront makes the registration process smoother and reduces the risk of disputes later.

Why the Partnership Agreement Matters

The partnership agreement is the framework of your business. A solid agreement covers:

• Capital contributions from each partner
• Profit and loss sharing percentages
• Decision-making rules (which calls need unanimous consent vs majority vote)
• Roles and management responsibilities
• Procedures for adding or removing partners
• Dispute resolution mechanisms
• Dissolution rules in case the partnership ends

If no written agreement exists, default provisions under the Partnership Act apply. These rarely match what the partners actually wanted, which is why a clear written agreement is non-negotiable.

How to Register a General Partnership in Singapore

Sorting out the roles and duties of each partner is important. Don't take it lightly. Once you have prepared all the documents and have a defined structure, you submit your application to the Accounting and Corporate Regulatory Authority (ACRA) through the Bizfile portal.

The steps are as follows.

Step 1: Business Name Verification

Choosing a name for your business is a standard but important step. Don't pick confusing or offensive words, or you will face the consequences of the Business Names Registration Act. After checking that your business name is available, it needs to be approved by the authorities to be used.

Step 2: Application Submission Through Bizfile

The application to register a business structure in Singapore is submitted through Bizfile, the government's online portal. If the application is successful and ACRA does not refer it to other government agencies, the partnership is usually approved within 24 hours. In some cases, the review can last up to 2 months.

The registration fee is SGD 100 for 1 year or SGD 160 for 3 years, plus SGD 15 for the name reservation.

Step 3: Endorsement by All Partners

After submission, every partner receives a notification asking them to endorse the application through Bizfile. If any partner fails to endorse within the deadline, the application is cancelled.

Step 4: Receive Your UEN and Business Profile

Once approved, ACRA issues your Unique Entity Number (UEN) and a free Business Profile. You can use these to open a business bank account, sign contracts, and start trading.

Responsibilities of Partners in a General Partnership

Each partner in a General Partnership carries serious responsibilities. The structure depends on partners acting in good faith and sharing the workload fairly.

Key Responsibilities

• Manage the business. All partners have equal rights to participate in management, unless the partnership agreement says otherwise.
• Share profits and losses. Profits and losses are split according to the agreement, or equally if no agreement exists.
• Cover debts and obligations. Each partner is jointly and severally liable for the business debts. A creditor can claim the full amount from any one partner.
• Act in the interest of the partnership. Partners owe each other fiduciary duties of loyalty and good faith.
• Pay personal income tax. Each partner reports their share of profits in their personal income tax return.
• Make Medisave contributions. Singapore-resident partners must contribute to Medisave through the CPF Board each year before renewing the partnership.
• Maintain accurate records. The partnership must keep proper accounting records, even if no formal financial statements are required to be filed publicly.

The Risk of Personal Liability

The biggest risk of a General Partnership is unlimited personal liability. If the business cannot pay its debts, creditors can come after each partner's personal assets, including savings, property, and other investments.

Worse, the liability is joint and several. If one partner cannot pay their share, the others must cover it. A bad decision by one partner can drag down all the others.

This is why most growing businesses outgrow the General Partnership model fast. Once revenue or risk increases, partners usually convert to an LLP or Pte Ltd for the limited liability protection.

Tax Implications for General Partnerships

A General Partnership is not a separate legal entity, which means it does not pay corporate tax in Singapore. Instead, the partnership is treated as transparent for tax purposes. Profits flow through to the partners, who report their share as personal income.

How Partnership Taxation Works

• Individual partners pay personal income tax on their share of profits at progressive rates from 0% to 24%.
• Corporate partners (if any) pay corporate tax at 17% on their share.
• The partnership itself files an informational tax return with IRAS showing how profits were divided.
• Each partner then includes their share in their own personal or corporate tax return.

Tax Compared to a Pte Ltd

For small operations where partners earn less than SGD 80,000 each, personal income tax rates can be lower than the flat 17% corporate tax rate. But as profits grow, the math shifts.

A Pte Ltd pays a flat 17% and can claim:

• The Start-Up Tax Exemption (75% on the first SGD 100,000 of chargeable income for 3 years)
• The Partial Tax Exemption from year 4 onwards
• The 2026 CIT Rebate of up to SGD 40,000

General Partnerships cannot claim any of these tax incentives. They are also not eligible for most Singapore SME grants, which require an incorporated entity.

GST Registration

If the partnership's annual taxable turnover exceeds SGD 1 million, it must register for Goods and Services Tax (GST) with IRAS. Below that threshold, GST registration is optional.

General Partnership vs Limited Partnership: What's the Difference?

A General Partnership and a Singapore Limited Partnership look similar on the surface but work in very different ways.

Advantages and Disadvantages of a General Partnership

Opening a Business Account

Running a business means sending and receiving money. People can assume that, since a General Partnership is very simple, each partner can use their personal account. In practice, partnerships need their own business account to keep finances clean and protect against personal liability blurring.

You have two main options:

Corporate bank account. Provided by a banking institution, getting a business account at a traditional bank can be time-consuming. Each institution has different requirements, especially for partnerships with foreign partners.

Digital business account. Many startups and SMEs choose digital accounts. If you want to start transactions right after registration, fintech providers like Statrys offer business multi-currency accounts with fast online onboarding without the paperwork typical of a traditional bank.

Foreigners Registering a General Partnership

As mentioned in the registration section, foreigners can set up a Partnership in Singapore. A foreigner needs to be a Permanent Resident of Singapore to carry out the registration directly through Bizfile.

If the partners are all living outside Singapore, they may not have access to Bizfile under the SingPass, which is a multipurpose access account for Singapore residents. In this situation, they need to designate an authorised representative who is a Singapore resident and contact a professional service provider to handle the registration on their behalf.

If all partners live outside Singapore, they can hire a local manager based in the country. If they don't want to do that, a foreign partner can relocate to Singapore. Keep in mind that an Employment Pass or EntrePass approval from the Ministry of Manpower (MOM) is required for this.

Conclusion

General Partnerships help individuals formalise a business relationship. Think about it as a way to set defined lines of roles and duties between partners. It's a better way to organise your business and improve your operations.

Remember, forming this type of structure exposes the personal assets of the partners. There are other forms of business that can protect you and your investment more effectively. The LLP gives partnership flexibility with limited liability. The Private Limited Company gives you a separate legal entity, tax incentives, and the credibility to scale.

A person is safer as a shareholder than as a General Partner, since companies have a separate legal identity. Our advice is to explore the options and consult the experts. They can guide your decision based on your risk profile and growth plans.