A limited liability partnership (LLP) is comparable to a regular partnership, but it has the added benefit of limiting personal liability for business obligations. Unless individual members have personally guaranteed a loan to the firm, the LLP, not the individual members, is liable for any debts it incurs.
LLPs are more difficult to form and manage than traditional partnerships. LLPs must fulfil many of the same rules as limited liability corporations, although they are intended for profit-making businesses. This company structure should not be used by non-profit organisations.
Partnership members and their responsibilities
Any partnership must have at least two designated members at all times, and if one departs, the partnership will be dissolved. One of the partners must be ‘nominated’ to be in charge of the partnership’s reporting responsibilities.
That does not absolve the other partners of responsibility! The chosen partner is in charge of the partnership’s administration; it is up to all of the partners to ensure that it is completed (correctly, and on time). In a partnership, duties and obligations include:
- Registering the business for Self-Assessment with HMRC
- Registering the partnership for VAT if turnover meets the threshold
- Appointing an auditor
- Keeping accounting records (known as bookkeeping)
- Preparing, signing and submitting annual accounts to Companies House
- Any changes should be reported to Companies House (for example, to the registered name or address of the partnership or its members)
- If the LLP is wound up and dissolved, I will represent it.
Where to register your LLP and get help
Companies House can help you with the limited liability partnership registration process (LLP). They cannot, however, provide you with extensive instructions on how to prepare the essential paperwork.
You may register your LLP yourself by filling out the LL IN01 application form and forwarding it to Companies House together with the cost.
Getting professional counsel is a smart idea. For a charge, a company formation agency, solicitor, or accountant can complete the procedure and provide guidance. A solicitor can also assist you in drafting your deed of partnership. Many incorporation agents and software vendors may now give a web-based electronic service to their clients. This is a simpler and faster approach to registering your LLP, however, this is chargeable.