Partnership is a business organization which two or more individuals manage and run a business. In this kind of partnership, risks, management, profits, and liabilities are divided equally amongst partners. There are two types of partnership that foreign investors can contribute to:
- Ordinary Partnership
- Limited Liability Partnership
Note: Foreign investors generally choose to have Limited Liability Partnership.
Ordinary Partnership
It is similar to Sole Trader business model. The only difference between Sole Trader and Ordinary Partnership is that, risks, profits and liabilities are divided equally amongst partners.
Registration
- Name registration
- Declaration of partners
- Registration to Tax Office (partnership tax declaration and individual tax declaration should be made separately).
- One of the partners is appointed to declare accounting, entries and tax return on behalf of Mutual Company.
Limited Liability Partnership
It protects the advantageous structure of partners and has enabled the establishment of Limited Liability Partnership as a measure to the disadvantage of unlimited partnership by enacting a law in 2000. Partners can be natural or legal persons. There should be minimum one limited liable person and more than one person should run the company management as director.
Registration
- Name Registration
- LP5 and LP6 Forms are filled in
- Registration to Registrar of Companies is a must
- Declaration of partner liabilities.