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7.LLP Partnerships

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 In brief

Setting up:

You have to register with Companies House, the method is similar to registering a company.

Liability:

The LLP will be a separate legal entity and while the LLP itself will be liable for the full extent of its assets the liability of the members will be limited. Under certain circumstances, however, claims for economic loss could be made against individual members who have been negligent. Any such claim would be a civil action outside the contract as the party would have contracted with the LLP.

Management:

The business is controlled by the 'designated members' (who have a similar responsibility to a directors / secretary of a Ltd Company) and the 'members'.

Finance:

Capital is provided by the members, LLP's are similar to 'Partnerships' or 'Sole Traders' in this respect.

Profits:

Incomes derived by the members will be closer to that of a 'Partnership' than to the dividends paid by companies.

Taxes Etc.:

An LLP will be taxed as a 'Partnership'. The members will provide working capital and share any profits.

Continuity:

The LLP is a legal entity in its own right.

 Details:

An LLP is an alternative corporate business vehicle (introduced April 6th 2001) that gives the benefits of limited liability but allows its members the flexibility of organising their internal structure as a traditional partnership.

Any new or existing firm of two or more persons will be able to incorporate as an LLP in England, Scotland or Wales. It is not possible to convert a company to an LLP or vice versa. LLP's are not available to Charities, there must be a view to profit.

LLP's are similar to companies in the respect that they will be required to provide financial information equivalent to that of companies, including the filing of annual accounts. Also they must notify any changes to:
The LLP membership; members' names & addresses; the Registered office.

For further information visit Companies House Web site or view our FAQ's page
(See below.)

 

Search the site Business Service's listings for accountants and company formation services in your area:

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For more information about LLP's visit the Companies House Web site:

Companies House

View the original Frequently Asked Questions at the launch of LLP's:

news  faq on llps



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