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.
- General Partner
The general partners are, in all major respects, in the same legal position. 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.
- Limited Partner
Limited partners contribute capital to the partnership but do not participate in the daily operations of the company. The limited partner shall not be liable as a general partner unless the limited partner participates in the management of the LP.
The general process for registering a Labuan LP involves the following:
- The applicant must appoint a Labuan trust company for the registration, which would conduct due diligence on the applicant. All documentation required to be submitted to Labuan FSA must be filed through a Labuan trust company.
- A Labuan LP shall have the words “Limited Partnership”, “Ltd.P.”, “LP” or “L.P” as part of its name (any other abbreviations in romanised characters or words in the applicant’s national language which connotes a limited partnership or any abbreviation may be approved by Labuan FSA).
- The name may be in foreign characters, alphabets or languages provided that an accurate and certified rendition of the name in the English language is clearly stated on all its documents.
- The application for registration must be accompanied by the relevant documents and payments.
Partnership Registration under the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA)
Section 131(2) of the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA) requires that the applicant appoint a qualified person to act as a Shariah adviser for the partnership. The duties of the Shariah adviser pertain to the management and operations of the Islamic partnership to ensure compliance with Shariah principles.