Introduction to Taiwan Limited Partnership
The registration of limited partnership in Taiwan is regulated by the Limited Partnership Law. This Article briefly introduces the characteristics and rules of Taiwan limited partnership for our client’s reference and have more understanding.
1. Definition
Limited partnership means a for-profit juridical person organized and registered under the Limited Partnership Law.
A limited partnership shall be composed of at least one general partner and one limited partner who agree to make capital contribution to the partnership. The general partner is directly or indirectly responsible for actual business operation of a limited partnership and shall be jointly and severally liable when the assets of the limited partnership are not sufficient to meet its liabilities. Limited partner have liability limited to the amount of his or her capital contribution under a limited partnership agreement.。Person and company can act the limited partnership.
2. Feature
Partners shall sign a limited partnership agreement to provide the specific amount of the capital to be contributed by each partner. This agreement may also include the instalment of capital contribution and the methods, conditions, durations and etc. thereof.
Limited partnership is a short-term, the organization of the project type. Taiwan Company is a long-term business.
3. Business Address
Limited partnership must maintain a business address in Taiwan where the correspondence from Taiwan Government can be served and business is carried out.
4. Capital
There is no limitation on the amount of capital of Taiwan limited partnership.
A partner may contribute cash, property, and goodwill, service rendered or other interests to the capital of the limited partnership, provided that the amount of the goodwill or other interests contributed by any limited partner shall not exceed certain proportion of the total capital contribution of the limited partnership.
A partner of a limited partnership may transfer all or part of his or her capital contribution to another person or persons in accordance with the limited partnership agreement or with the unanimous consent of other partners. A partner shall not retrieve all or part of his or her capital contribution unless otherwise provided by the limited partnership agreement.
When the amount of capital is less than TWD30,000,000，the total amount of shares of labor and credit of the company shall not exceed the half of paid-in capital. When the amount of capital is more than TWD30,000,000，the total amount of shares of labor and credit of the company shall not exceed the quarter of paid-in capital.
5. Manager
Only the general partner can act the manager of limited partnership. The limited partner cannot be involved in the daily business operation of the limited partnership, as such, limited partners cannot act as the manager of the limited partnership.
6. Distribution of Profits
If Limited partnership have surplus distribution, it can distribute to partners any time and don’t have to allocate according to proportion of investment. They can hold the board of directors and annual general meeting without a fixed schedule.
Generally, Limited partnership is according to the limited partnership agreement to distribution of profits. If the limited partnership agreement is not including the distribution of profits, the partners is according to the proportion of the investment.
7. Language of Registration documents
The language of Taiwan Business Registration is Traditional Chinese. If the relevant documents for foreign investment are in English, they shall be translated into Traditional Chinese.
8. Financial Report
At the end of each fiscal year, the representative of a limited partnership shall submit to all partners an annual business report, financial statements and a proposal for earnings distribution or loss off-setting for the approval by two-thirds or more of the partners.
A limited partnership agreement may, notwithstanding the provisions set forth in the preceding Paragraph, specify a time other than the end of each fiscal year to submit a proposal for earnings distribution or loss off-set.
9. Taxation
According to Taiwan Tax Law, the business entity with fixed places of business shall file an application for business registration with the competent tax authority before commencement of business.
Except as otherwise prescribed by Taiwan Tax Law, a business entity, whether or not it has sales, shall file a bimonthly tax return on a prescribed form for its sales amount and tax payable or overpaid of the preceding two months together with tax deduction and other appropriate documents with the competent tax authority prior to the fifteenth day of the following period. The business tax payable, if any, shall be paid to the government treasury in advance. The receipt for tax paid shall be enclosed with the tax return.
A business entity which applies zero ratings as prescribed in Tax Law may apply to the competent tax authority for filing a monthly tax return for its sales amount and tax payable or overpaid of the preceding month prior to the fifteenth day of the following month. Once approved to file a monthly tax return, the business entity cannot apply for approval to change the filing period within a year.
If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:
Tel: +852 2341 1444
Mobile: +852 5616 4140, +86 152 1943 4614
WhatsApp/ Line/ Wechat: +852 5616 4140
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