What is a Limited Liability Partnership?
A Limited Liability Partnership (LLP) is a legal business structure in which there are two or more persons associated for carrying on a lawful business with a view to profit, and is registered as such at Companies House.
Unlike a traditional partnership, an LLP is a separate legal entity distinct from its members. In general, the LLP and not its members is liable for the debts of the LLP, thus affording the protection of limited liability. In this respect, an LLP is akin to a limited company.
However, as far as tax is concerned, an LLP is subject to the regime for traditional partnerships and the tax rules for limited companies do not apply to LLPs. Therefore the choice between an LLP and a traditional partnership is tax neutral.
Every LLP must have at least two ‘designated’ members at all times. As well as responsibility for the day-to-day running of the LLP, designated members have responsibility for such things as signing the accounts, delivering accounts to the Registrar of Companies on a timely basis, the appointment and removal of auditors (if required) and notification of changes in members’ details and any change of the registered office address to Companies House. If the number of designated members falls below two, all the members of the LLP automatically become designated members.
Why have an LLP Agreement?
LLPs are governed by the Limited Liability Partnerships Act 2000 and by the Limited Liability Partnership Regulations 2001. This legislation envisages that an LLP Agreement will usually be entered into by the members and is silent on matters such as board structure or management structure, as well as on many other matters to provide the flexibility for members to decide on their own arrangements. In the absence of an LLP Agreement, the Regulations provide default provisions which are likely to be inappropriate in most cases.
It is therefore advisable to have a professionally drafted LLP Agreement prior to the setting up of an LLP which is tailored to your own specific circumstances.
Our fees for our LLP Package are £350 and include the following items:
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Companies House Incorporation Fee
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LLP Register including Register of Members, Minutes Section and Membership Certificates
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Taking your instructions for the LLP Agreement either at our offices or by means of a questionnaire
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Two bound copies of the completed LLP Agreement
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Optional Extras:
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Additional bound copies of the LLP Agreement – £10 per copy
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The above prices exclude VAT.
These notes are intended for general guidance only and individual advice should be sought as appropriate.
