Limited Liability Partnerships

How does a Limited Liability Partnership differ from a partnership?

It has its own legal personality and is liable for its own debts/ obligations

How is an LLP formed?

To receive the Certificate of Incorporation, the partnership must be incorporated at Companies House with the relevant fee and Form LLIN01 which states:

• The name

• The Registered Office’s address

• Which members are designated members

What is the Continuing Registration Regime for LLPs?

LLPs must file updates with Companies House for:

• Change of name

• Change of registered office

• Change in membership

• Creation of a charge

• Annual confirmation statement

• Accounts

They must keep in House Records of:

• Register of Members

• Persons of Significant Control

What does a designated member do in an LLP?

• Deal with accounts on behalf of other members

• File to Companies House

• Act on behalf of the LLP if wound up

How many designated members must there be in an LLP?

At least 2

When does a member cease to be a member in an LLP?

• Death

• Agreement with other members

• Notice to other members

• Dissolution

What are the default provisions where there is no LLP Agreement?

1. Capital and profits shared equally

2. Indemnification for payments/ liabilities incurred in usual course of business

3. Each member may take part in management

4. Remuneration not entitled

5. Unanimous consent required for new members, assignment, expelling members or changing nature of business

6. Ordinary decisions made by majority

7. Books and Records always ready for inspection at Registered Office

8. Members must give full and true accounts of anything affecting LLP

9. Non-agreed competing business profits must be accounted for

10. Benefits derived from the LLP must be accounted for

Taxation of LLPs

Same as with a partnerships subject to some Stamp Duty/ SDLT relief and the LLP must register for VAT, not its members