A Limited Liability Partnership is a legal entity which limits the liability of its owners and members. A LLP is basically a hybrid between a partnership and a limited company which operates under a combination of the Limited Liability Partnership Act 2000 and the Companies Act 2006. It allows business partnerships to enjoy the benefits of Limited Liability, avoiding the problems of joint and several liabilities that apply to ordinary partnerships.
There are no shares in a LLP, instead of issuing shares the members of a LLP are its investors and are issued Interest Certificates which reflect the amount of investment in the partnership. A LLP does not require a Memorandum and Articles of Association instead a Partnership Deed is used to specify how profit is split and what happens in the event that the partnership is wound up.
The management of the LLP is conducted by the Designated Members (similar to Directors). There must be two or more Designated Members. Each Designated Member is responsible for fulfilling certain duties and obligations. Unless the Registrar is specifically advised which members are Designated Members all members will be deemed to be so.
The LLP is not subject to any corporate income tax in the UK, instead the profits are distributed to the members who pay personal income tax on their income from the partnership. The members are liable for Capital Gains Tax and are obligated to make National Insurance Contributions.
In order to register a LLP the following documentation is required:
- Certified proof of ID for the members and beneficial owner
- Certified proof of address for the members and beneficial owner
- Completed Application Form (supplied by Eltoma)
The formation of a LLP is very quick once the signed LLP2 form is delivered to Companies House. A next day formation service can be offered, subject to receipt of all correct documentation.
The following documents will be received upon incorporation:
- Certificate of Registration
- Partnership Agreement
- Partnership Combined Register
- Minutes of the First Members Meeting
- Membership Certificates & Membership Register