What is a Limited Liability Partnership?
Limited Liability Partnership (LLP) is a business entity which was introduced to the UK relatively recently. The legislation for LLP Registration was introduced in in 2000. UK LLP Registration is governed by the Limited Liability Partnership Act 2000. Limited Liability Partnership is a corporate body and is legally independent of its members in comparison to a normal Partnership, where legal existence is dependent upon its members. LLP members are not responsible for each other’s actions and Limited Liability Partnership members cannot lose any more than they invest, unless fraudulent trading or personal neglect is suspected.
What are the minimum LLP Formation Requirements?
LLP formation in the UK requires at least two persons or members. Limited Liability Partnership members can be individuals or corporations. Every UK LLP must have at least two; formally appointed designated members at all times and Limited Liability Partnership designated members have the same rights and duties towards the LLP, but also extra responsibilities. Limited Liability Partnership designated members are responsible for signing off LLP accounts, filing them with Companies House, etc. LLP formation is not applicable for all businesses, (for example, non-profit making activities) but Limited Liability Partnerships are becoming increasingly popular, not just for professional firms of accountants and solicitors, but also for trading activities.
What are the advantages of an LLP?
There are several Limited Liability Partnerships advantages that should be considered when deciding on what legal structure is right for you. A Limited Liability Partnership does not pay corporation tax and a LLP member is only taxed on his/hers share of profits generated in a tax year, which runs from April to April. Another limited liability partnership advantage is that LLP members do not need to hold general meetings and keep records of meetings unlike normal Ltd companies. It can be potentially possible for non-residents to structure UK LLP in a way to minimise taxes.
How do I Register my LLP?
LLP Registration is no different from ltd company registration. UK Companies Limited provides LLP Registration through its online system linked to Companies House. To form a Limited Liability Partnership you would need to provide: LLP name; registered office address, details of the LLP members including designated members. LLP formation has the same name restrictions as ltd company registration. You will need to provide an approval from the government or other body, if your UK LLP name contains a prescribed or sensitive word and include a copy of this approval with your application.