Limited Liability Partnership - LLP

A Limited Liability Partnerships can be incorporated within 4 days.

Incorporating a Limited Liability Partnership

The Act generally allows two or more persons associated for carrying on a lawful business with a view to profit to incorporate a limited liability partnership by subscribing to its incorporation document.

Suitable for new and existing partnerships wishing to obtain limited liability status, and aimed particularly at professional partnerships such as accountancy and solicitors firms.

We will then ensure that the requirements of the Registrar have been met and submit the necessary documentation to the Registrar of Companies to incorporate the new LLP.

• Suitable for new and existing partnerships wishing to obtain limited liability status
• Aimed particularly at professional partnerships such as accountancy and solicitors firms
• Maintains tax status of a partnership
• Members have limited liability
• Suitable for most commercial business activities

Limited Liability Partnership

The main difference is a limited liability partnership has the flexibility of a partnership and is taxed as a partnership. In other respects it is very similar to a private limited company.

Suitable for new and existing partnerships wishing to obtain limited liability status, and aimed particularly at professional partnerships such as accountancy and solicitors firms. Incorporation is a very simple process. We will then ensure that the requirements of the Registrar have been met and submit the necessary documentation to Companies House to incorporate the new LLP.

• Suitable for new and existing partnerships wishing to obtain limited liability status
• Aimed particularly at professional partnerships such as accountancy and solicitors firms
• Maintains tax status of a partnership
• Members have limited liability
• Incorporation in 2 - 3 days
• Suitable for most commercial business activities

Key Features

It is a body corporate, ie a separate legal entity distinct from its members.  The LLP can own and hold property, employ people and enter into contractual obligations.  Debts incurred are the debts of the LLP.

An LLP has unlimited capacity which means that third parties need not be concerned about any restrictions on its activities.

An LLP has members but no directors or shareholders.  An LLP has no share capital and is not subject to the company law rules governing the maintenance of capital.

The members of an LLP have limited liability.

An LLP has complete flexibility as to the internal structure which it wishes to adopt: there are no requirements for board or general meetings or decision making by resolution.  An LLP does not have a memorandum or articles of association.

As the members have limited liability, the protection of those dealing with an LLP requires that the LLP maintains accounting records, prepares and delivers annual accounts to the registrar of companies, and submits an annual return in a similar manner to companies.  However, the exemptions available to companies, for example with respect to the delivery of abbreviated accounts and exemption from audit also apply to LLPs.

Members and Designated Members

There are no shareholders in an LLP.  Instead there are members and they are identified in the initial incorporation document with subsequent changes to the membership being notified within 14 days of the event occurring.

What is the difference between a Limited Liability Partnership and a limited company?

The advantages of an LLP include:

• Limited liability: reduced risk to personal wealth from creditors’ claims
• Internal flexibility: facilitates participation in management and maintenance of ethos of partnership

If the position of an LLP is compared with a private limited company, such companies have:

• Limited liability
• Internal flexibility – facilitates informal and flexible decision making in such companies, for example, allowing meetings to be called on short notice, use of written resolutions and acceptance of informal unanimous assent
• Privacy – same as LLP – disclosure subject to exemptions
• No need for LLP agreement – the memorandum and articles of association act as default standard provisions

Membership of a Limited Liability Partnership

A limited liability partnership must have at least two members. If membership falls to only one member and the limited liability partnership continues to carry on business for more than 6 months, then the benefits of limited liability are lost.

Designated members in a Limited Liability Partnership

Every limited liability partnership must have two designated members at all times. If there are fewer than two designated members then every member is deemed to be a designated member. (The limited liability partnership may have decided that all members will be designated members or that only some members will be designated members).

After incorporation, you must tell Companies House about:

• the appointment of a new member or designated member
• a member or designated member ceasing to act in the limited liability partnership
• changes in a member's or designated member's name or address or any of the other details originally registered
• changes in a member's status (member to designated member or vice versa