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When you register a company , you have various options, including a Limited Liability Partnership (LLP). An LLP enables professionals such as accountants, architects, solicitors and medical practitioners in partnership to benefit from limited liability.
Limited liability partnerships are typically formed by professionals, including accountants, architects, solicitors and medical practitioners. In some cases, registering an LLP offers more advantages than a limited company, and today, many family-owned businesses use the LLP model. If you have specific questions on the tax implications and benefits, please seek advice from a tax consultant.
In a limited company, a business will have a director (or directors) and, sometimes, a secretary. In a limited liability partnership, however, the company will have at least one “general partner” and one “limited partner”. General and limited partners have different responsibilities and levels of liability for any debts the business can’t pay. All partners pay tax on their share of the profits.
The main benefit of registering a limited liability partnership is that the members’ (or partners’) private assets are protected. In the case that the business fails, the partners will only lose the money they have invested; their private assets will stay secure. If something goes wrong in an unregistered partnership, on the other hand, all partners can be held liable for the debts of other partners. As such, an LLP offers more security to its partners and can prevent the business from substantially affecting a partner’s personal finances should it fail.
An LLP has various responsibilities, including:
Our LLP formation application process is entirely online. Typically, your LLP will be registered within three to six hours, but this time can vary depending on the workload of Companies House on the day.
If your business has two or three members who draw similar salaries and make similar contributions, registering an LLP might be the best option for you. However, if you are likely to employ people whose payroll will be higher than the owners’ salary, a limited company may suit you better. We recommend seeking advice from a tax consultant to discuss your options.
Partners’ responsibilities
You must appoint at least one “general partner” and one “limited partner”. A partner can be an individual or a company. Whether you are a general or limited partner affects your liability for the partnership’s debts and your responsibilities.
You cannot be a general and a limited partner at the same time, and all partners are equally responsible for any debts or obligations until the partnership has been officially registered.
As a limited partner, you:
As a general partner you:
You must:
It is not a legal requirement to have a partnership agreement, but we highly recommend it, as it will help to prevent any partnership disputes in future.
Set up a Limited Liability Partnership TodayAre you a professional looking to set up a limited liability partnership? Mint Formations can handle the entire process for you and offer a wide range of extras, including an online company manager portal to access everything you need for your business in one place.
Set up a Limited Liability Partnership TodayCall now: 0207 112 8684
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