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LABUAN PARTNERSHIP

Labuan Limited Partnership

A limited partnership (LP) is a business entity comprising two or more partners who operate or manage a business together. The minimum number of partners for a Labuan LP is two partners i.e. one general partner and one limited partner and the maximum number of partners allowed is fifty partners.

Partners may be a corporation except for firms which are set up for professional practice, in which case it must consist of natural persons only and supplemented with professional indemnity insurance coverage issued by an insurer approved by Labuan FSA.

1. General Partner

A general partner shall have all the rights and powers and shall be subjected to all the restrictions and liabilities of a partner. Therefore, they have management control; share the right to use partnership property; share the profits of the firm in predefined proportions; and have joint and several liabilities for the debts of the partnership.

2. Limited Partner

A limited partner contribute capital to the partnership but do not participate in the daily operations of the partnership. The limited partner shall not be liable as a general partner unless the limited partner participates in the management of the LP.


Labuan Limited Liability Partnership

A limited liability partnership (LLP) is a business entity comprising two or more partners who operate or manage a business together. LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. It is capable of entering into contracts and holding property in its own name. The minimum number of partners for a Labuan LLP is two partners i.e. one designated partner and one limited partner. A Labuan LLP is a type of business entity that permits a partner to be shielded from liability for partnership obligations created by another partner's, or person's misconduct.

Advantages of Limited Liability Partnership:

 
  i.  It protects members from personal liability, except to the extent of their investment in the LLP.
  ii. LLP is not a separate entity for income tax purposes. Profits and losses are passed through directly to the partners.

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