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Limited liability partnership package

What is a limited liability partnership?

The Limited Liability Partnership (LLP) is a form of registered company created to enable professionals such as accountants, architects, solicitors and various types of medical practitioners in partnership to take advantage of limited liability it offers to its partners.

What type of businesses usually operate as LLP?

Limited Liability Partnerships are typically formed by professionals such as accountants, architects, solicitors and various types of medical practitioners. When restrictions are imposed by professional associations to operate as a limited company, they choose to operate as an LLP. Traditionally they used to operate as partnerships, but nowadays register as LLP’s. Many family owned firms also use the LLP model to take some specific advantages of operating as LLP. If you have specific questions on tax implications and benefits, please seek advice from a tax consultant.

What are the basic requirements to form an LLP?

  • Have a registered address (also known as your principal place of business)
  • An LLP must have at least 2 members (partners) and no upper limits to number of partners
  • Appoint general and limited partners
  • Register with Companies House

Who are the officers of an LLP?

A limited liability partnership does not have directors or a secretary as in a limited company. An LLP must 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.

What is the advantage of forming LLP?

When you register as a Limited Liability Partnership (LLP) the members (partners) can protect their private assets. If the business fails the partners only lose the money they have invested in the partnership and their private assets will stay secure. On the other hand, if something goes wrong in an unregistered partnership, ALL or ANY partners can be held liable for the debts of other partners.

What are the statutory responsibilities of an LLP?

  • An LLP must maintain statutory registers (ex: register of LLP members and PSC register)
  • Must file accounts
  • Must trade and cannot be registered as dormant
  • Must file a confirmation statement with Companies House
  • Must exist until it is formally terminated (via dissolution or a similar process)

How long does it take to register an LLP?

Our LLP formation process is online and it is very quick. Typically, we will register your LLP within 3-6 hours. However, this registration time can vary as per Companies House workload on the day you register.

Will my choice of LLP or LTD depends on whether we employ others?

If your business has two or three members who make similar contributions, draw similar salaries and likely to remain so, then LLP option might probably be more efficient. If you are likely to employ people and their payroll is likely to be higher than owners’ salary, a limited company might suit you better. Please seek advice with a tax consultant and discuss your options.

How does partnership work in an LLP?

Partners’ responsibilities

You must have at least one ‘general partner’ and one ‘limited partner’ - a partner can be an individual or a company. What type of partner you are makes a difference to:

  • your liability for the partnership’s debts
  • your responsibilities

You can’t be a general and a limited partner at the same time. All partners are equally responsible for any debts or obligations until the partnership has been registered.

Limited partners

As a limited partner you:

  • Contribute an amount of money or property to the business when it’s set up
  • Are only liable for debts up to the amount you’ve contributed
  • Can’t manage the business
  • Can’t remove your original contribution
  • You must register for Self-assessment with HM Revenue and Customs (HMRC).

General partners

As a general partner you:

  • Are liable for any debts the business can’t pay
  • Control and manage the business
  • Can make irreversible (‘binding’) decisions for the business
  • Can apply for your business to act as an authorised contractual scheme (ACS)

You must:

  • Register the business with Companies House
  • Register the business for Self-assessment with HMRC - you must also register separately as an individual
  • Register the business for VAT if you expect sales to be more than £85,000 a year
  • Act for the business if it’s wound up and dissolved
  • You may have to send accounts to Companies House if the general partner is a limited company.

Is a formal partnership agreement required for an LLP?

It is not a legal requirement to have a partnership agreement. However, it is highly recommended. This will help to prevent any partnership disputes in future.

LLP registration package

LLP registration package

Register your limited liability partnership company, the correct way. We offer simple step by step instructions and live support.

Register your LLP now £34 VAT

LLP registration for international customers

Click here

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