Partnership In Singapore
A partnership is not a person in law and, unlike a company, it is not a separate assessable entity for tax purposes. Individual partners are therefore assessed separately on their respective share of income from the partnership. A partnership need not be confined to individuals. A joint venture between two companies or between a company and an individual will be classified as a partnership.
The joint ownership of a property such as a house or a plantation does not of itself constitute a partnership. A widow of a deceased partner who receives a share of the profits of a business as an annuity is not deemed to be a partner in the business. An association of persons would not constitute a partnership unless they carry on a business.
Creation and existence of partnership. Whether a partnership exists is partly a question of law but more so a question of fact. Some of the more important points to be considered are:
- whether there is an agreement.
- whether the partnership is registered.
- whether it is registered with the appropriate professional body (Institute of Certified Public Accountants of Singapore, etc).
- what the basis of sharing profits and losses is, for example, the sharing of losses is a strong indication that a partnership exists.
- whether the partnership has a bank account; what the methods of operating the account are; who is authorised to operate it and whether there are any limitations on the issuing of cheques.
- what names are shown on the business stationery, in trade directories, in the register of the Registrar of Business Names, in the register of the relevant professional body where applicable, etc.
- whether the business is carried on by all or any of the persons acting for all.
The partners which form a partnership are collectively referred to as a “firm”. The partnership carries on business under the “firm’s name”, which must be registered with the Registrar of Business Names. Any individual who merely shares in the income of a partnership is not necessarily a partner with the persons carrying on the business of the partnership. For example, employees of a partnership may be remunerated with a share in the business profits but such an arrangement is not sufficient to establish that the employee is a partner with persons carrying on the business.
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