Key facts for limited liability partnerships
- UK Registered address
- One company secretary ( person or corporate)
- 2 members (person or corporate)
- General Trade LLP Agreement
- Company statutory books must be maintained properly
- There are two authorities that your company is accountable to one is the Inland Revenue where your taxes and tax return must be file and the second one is the Companies House where your company is registered and abbreviated accounts must be file. Failure to file accounts on time will result in penalty being imposed.
- Each members will also have to file there personal tax return
- VAT - Must registered when business turnover reached £ 64,000
- Accounts - after the accounting period end which is 12 months from the date of incorporation you will have 9 months and 1 day to file the corporation tax return and 10 months to file the accounts with the Companies House
- LLP are not tax but the members will be tax personally
Limited Liability Partnerships
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What is a limited liability partnership?
A limited liability partnership is a new form of legal business entity with limited liability.
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What is the difference between a limited liability partnership and a limited company?
The main difference is that a limited liability partnership has the organisational flexibility of a partnership and
is taxed as a partnership. In other respects it is very similar to a company.
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Who can form a limited liability partnership?
The Act generally allows two or more persons associated for carrying on a lawful business with a view to profit to
form a limited liability partnership by subscribing to its incorporation document - Form LLP 2. (In law, 'person'
includes individuals and companies.) However, limited liability partnerships are not available for all activities
such as non-profit-making activities.
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How do I form a limited liability partnership?
You will need to send an Incorporation Document Form LLP2, together with the registration fee, to the Registrar of
Companies.
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What is an Incorporation Document (Form LLP2)?
The form sets out:
- the limited liability partnership's name;
- where the registered office of the limited liability partnership is situated (in England, Wales or Scotland);
- the address of the registered office;
- the name, full address and date of birth of each member; and
- which of these persons are to be designated members or that all members are designated members.
The Form LLP2 includes a statement of compliance that must be signed by a solicitor or a proposed member. Whoever
signs the statement must indicate in what capacity they are signing the form. All members and designated
members must sign and date the incorporation document to confirm their consent to act.
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What is a registered office?
It is the address of a limited liability partnership to which Companies House will send letters and reminders. The
registered office can be anywhere in England and Wales (or Scotland if your limited liability partnership is
registered there). The registered office must always be an effective address for delivering documents to the
limited liability partnership, and to avoid delays it is important that all correspondence sent to this address
is dealt with promptly. If a limited liability partnership changes its registered office address after incorporation,
the new address must be notified to Companies House on Form LLP287.
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What is the minimum number of designated members a limited liability partnership requires?
Every limited liability partnership must have at least two, formally appointed, designated members at all times. If
there are fewer than two designated members then every member is deemed to be a designated member. (The limited
liability partnership may have decided that all members will be designated members or that only some members will
be designated members.
After incorporation, you must tell Companies House about:
- the appointment of a new member or designated member - use Form LLP288a;
- a member or designated member ceasing to act in the limited liability partnership - use Form LLP288b;
- changes in a member's or designated member's name or address or any of the other details originally
registered on Form LLP2 - use Form LLP288c;
- changes in a member's status (member to designated member or vice versa ) - use Form LLP288c;
- a reversal of the decision that either all members or only specific members will be designated
members - use Form LLP8. (Forms LLP288c, changing the status of each member, may also be required).
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What is the difference between a member and a designated member?
With the agreement of the other members, a member may become a designated member at any time. Designated
members have the same rights and duties towards the limited liability partnership as any other member. These
mutual rights and duties are governed by the limited liability partnership agreement and the general law. However,
the law also places extra responsibilities on designated members. In particular, designated members are
responsible for:
- appointing an auditor (if one is needed);
- signing the accounts on behalf of the members;
- delivering the accounts to the Registrar;
- notifying the Registrar of any membership changes or change to the registered office address or
name of the limited liability partnership;
- preparing, signing and delivering to the registrar an annual return (Form LLP363); and
- acting on behalf of the limited liability partnership if it is wound up and dissolved.
Designated members are also accountable in law for failing to carry out these legal responsibilities.
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What happens to the documents sent to the Registrar?
All limited liability partnership formation documents are subject to certain checks including
checks of prospective members against the register of disqualified directors and members.
The Registrar then keeps the documents delivered and makes them available for public inspection.
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Can I choose any name I want for my limited liability partnership?
No. There are some restrictions on your choice.
Names cannot be reserved and formation applications are not processed strictly in order of time or
date of receipt. In the unlikely event that we receive more than one application to register the same
name, only one will be registered. The second will be refused because the name would then already be on
the names index. There can be no guarantee which application will be processed first. In general, company
incorporation applications delivered electronically are processed more quickly than other applications
delivered on paper, including LLP applications.
- Could my choice of name be rejected?
Yes, if:
- it is 'the same as' a name already on the index ;
- it includes the words 'limited liability partnership' anywhere except at the end of the
name. This applies equally to abbreviations or the Welsh equivalent of the words;
- it is offensive;
- its use would be a criminal offence,
- it includes 'SE' (or the abbreviation SE bracketed or with other punctuation marks
before or after the abbreviation).
In addition, some names need the approval of the Secretary of State before they can be registered.
These include names which contain words prescribed by regulations and names which suggest a
connection with central or local government.
If you avoid these restrictions, you can normally have your choice of name.
Make sure that the name you want to use is acceptable before you complete your incorporation
document - Form LLP2 - or complete Form LLP3 to change a limited liability partnership name.
- What does 'the same as' mean?
When deciding whether a name is 'the same as' another name, the Registrar ignores punctuation, the
limited liability partnership status and 'the' at the start of the name. A name that sounds the same
as one already on the Company or Limited Liability Partnership Names Index may be accepted if the two
names are spelt differently.
For example, if the name 'Body Limited' is already registered, then the following would be rejected:
- Body Limited Liability Partnership (or LLP)
- B and Y Limited Liability Partnership (or LLP)
- B & Y Limited Liability Partnership (or LLP)
You should be aware that if you adopt a name which misleads the public into believing that your business
is that of another business - for example, trading as a department store under the name 'BHS' - then you
may face a legal action for 'passing off' by the person whose business you have affected. Registration
of a name by Companies House is no guarantee that you are safe from such an action.
- Which names need approval?
Names which need approval are those which include words or expressions set out in statutory regulations
and names which give the impression that the limited liability partnership is connected with HM
Government or with a local authority.
- What if my choice of name needs approval?
If you choose a limited liability partnership name that needs the approval of the Secretary of State for
Trade and Industry, then before committing yourself, we should contact the appropriate authorities.
- How do I register my limited liability partnership name?
If your chosen name is not already on the Company and Limited Liability Partnership Names Index and
is not one which needs the Secretary of State's approval, then send your incorporation document
(or Form LLP3 if an existing limited liability partnership is changing its name) to:
- Limited Liability Partnership Team, Cardiff for limited liability partnerships
registered in England and Wales; or
- The Registrar of Companies for Scotland for limited liability partnerships
registered in Scotland.
If your documents are correct, the limited liability partnership name will be registered and
a certificate of incorporation issued.
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How long does it take to incorporate a limited liability partnership?
If all the documents are correct, the limited liability partnership will normally be incorporated
within five working days from receipt at Companies House.
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Can I deal direct with Companies House to form my limited liability partnership?
Yes. However, while our staff will be happy to give you guidance on general matters (such as filling
in forms or advice on limited liability partnership names), they cannot advise you whether an
incorporated limited liability partnership is the best vehicle for your business.
If you are unsure about any aspect of forming a limited liability partnership, please seek professional
advice from your solicitor, accountant or formation agent.
For more information please
contact us.
