Many people setup business as partnership. A partnership requires 2 to maximum 20 individuals. A partnership is not a legal entity. It cannot sue and get sued. Neither can it holds any assets. Profits form part of each partner’s personal income and are taxed at personal income tax rates. Many professionals work together as partnership. The greatest disadvantage to partnership is that each partner has unlimited liability. Each partner is liable for other partner’s liabilities. For example, if one partner is negligent in dealing with client’s matters, all partners are liable jointly and severally. Imagine this - It is already a risk having to handle one’s potential liabilities, it is a nightmare to be potentially liable for all other partners’ liabilities. There is a solution for this:

Convert to a Limited Liability Partnership (LLP). LLP was first introduced in 11 April 2005. In the LLP, owners are not personally accountable for the wrongful acts of other owners (although partners can be personally accountable for debts and losses resulting from their own careless actions). The LLP is a legal entity – it can sue and be sued. The LLP can own assets in its own name.   

The risk of being liable for other partner's liabilities are eliminated through an LLP.

More reading materials:

http://www.acra.gov.sg/Services/LLP/