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What is an LLP?
It is an alternative corporate business vehicle that gives
the benefits of limited liability but allows its members the
flexibility of organising their internal structure as a
traditional partnership. The LLP is a separate legal entity
and, while the LLP itself will be liable for the full extent
of its assets, the liability of the members will be limited.
When were they introduced?
The Limited Liability Partnerships Act 2000 and Regulations
2001 came into force on 6 April 2001.
What sort of organisation can become an LLP?
Any new or existing firm of two or more persons can
incorporate as an LLP.
Can I incorporate an LLP in Scotland as well as England/Wales?
Yes
Can I convert from being a limited company to an LLP?
The LLP legislation does not allow for a 'conversion process'
- in the way that a limited company can convert to PLC
status under the Companies Act, for example. Anyone with a
current limited company wishing to transfer their existing
company name to a new LLP should contact the LLP Team
Leader. The process will involve a closely controlled
company change of name and an LLP incorporation.
Establishing contact prior to submitting the necessary forms
will help ensure that this process is completed as smoothly
as possible.
What are the LLP disclosure requirements?
They are similar to those of a company. LLPs are required to
provide financial information equivalent to that of
companies, including the filing of annual accounts. Among
other things, they are also required to:
- File an annual return
- Notify any changes to the LLP's membership
- Notify any changes to their members names & residential
addresses
- Notify any change to their Registered Office Address
What are the duties of a designated member?
Designated members are responsible for carrying out certain
duties including some of those that would normally be
carried out by a company director or secretary. They include
such things as:
- Signing the annual accounts
- Filing the annual accounts and annual returns with
Companies House
- In the event of Insolvency proceedings, providing any
statement setting out the affairs of the business
i.e. assets, debts and liabilities.
How is an LLP taxed?
An LLP is taxed as a partnership. The internal structure of
the LLP is similar to that of a partnership. The members
provide working capital and share any profits. Income
derived by the members from the LLP will be closer to that
of a partnership than to the dividends paid by companies.The
Act also provides that any partnership converting to an LLP
will receive relief from stamp duty on any property
transferred in the first year, subject to conditions.
Members will be liable to pay Class 2 and Class 4 National
Insurance contributions. For further information on Tax and
National Insurance please visit the Inland Revenue Website:
www.inlandrevenue.gov.uk |
