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An Overview of Common Business Structures among Start-ups

An Overview of Common Business Structures among Start-ups

The table below outlines some of the key difference between the commonly used business structures among start-ups in Singapore.

Sole Proprietorship
Partnership

Limited Liability Partnership (LLP)

Company

Legal StatusNot a separate entitySeparate entitySeparate entity
LiabilityUnlimited liabilityLimited liabilityLimited liability
Personal LiabilityOwners/Partners are personally liable for debts and lossesPartners are not personally liable for debts and losses incurred by other partnersMembers are not personally liable for company’s debts and losses
Property OwnershipProperty in own nameProperty in LLP’s nameProperty in Company’s name
TaxesProfits are taxed at owners’/partners’ personal income tax ratesProfits are taxed at partners’ personal income tax ratesProfits are taxed at corporate tax rate
Perpetuity As long as owner is alive

Exists subject to partnership agreement

Has perpetual succession until wound up or struck offHas perpetual succession until wound up or struck off
CessationBy owners/partners – cessation of businessWinding up (Voluntary or Compulsory)

Striking-off

Winding up (Voluntary or Compulsory)

Striking-off

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