LLP
formation

Limited Liability Partnerships are often referred to in their abbreviated form as LLP’s. LLP’s were introduced in 2000 by the Partnerships Act 2000 to provide partnerships with the limited liability previously only available to companies. This is particularly suited to accountants, solicitors, architects, consultants, surveyors and other fields of expertise where a partnership is preferred to a limited company.

KEY BENEFITS

LLP’s may be suitable when the partners are members of institute or individual earnings are clearly defined and not simply added to one pot and distributed by dividend. Within an LLP the earnings of the members is normally seen as personal income.

Limited liability protects the member’s personal assets from the liabilities of the business. LLP’s are a separate legal entity to the members.

Flexibility. The operation of the partnership and distribution of profits is determined by written agreement between the members. This may allow for greater flexibility in the management of the business.

The LLP is deemed to be a legal person. It can buy, rent, lease, own property, employ staff, enter into contracts, and be held accountable if necessary.

Corporate ownership. LLP’s can appoint two companies as members of the LLP. In an LTD company at least one director must be a real person.

Designate and non-designate members. You can operate the LLP with different levels of membership.

Protecting the partnership name. By registering the LLP at Companies House you prevent another partnership or company from registering the same name.

FEATURES OF LLP

It has a separate legal entity just like companies.

The liability of each partner is limited to the contribution made by the partner

The cost of forming a LLP is low

Less compliance and regulations

No requirement of minimum capital contribution

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