- There must be expressed agreement when a partner is required to leave the partnership.

- All existing partners must give consent if they want to introduce new partners into the business.

- Accounts and books must be kept at the principal place of business and be made available to all partners. All partners are allowed to keep a copy of the accounts.

If this is so risky, why still set up this kind of entity?

This form of business is cheap, easy to set up, with minimal documentation and paperwork. There are much fewer guidelines and formalities (except for the Partnership Act 1961) wherein there is no requirement to appoint auditors, company secretary or tax agents. You do not need to disclose your financial statements to the general public.

When do you want to use this type of business entity?

General recommendation for you to choose this type of business is when:

1. Your risk of business liability is minimal or zero (you have to decide your risk tolerance); AND

2. Your business is not making huge profits. This is from the tax planning point of view.  KL Management