Limited Liability Partnership

Advantages and disadvantages

Advantages

  • High international prestige as a member of the European Union
  • LLP is a body corporate similar to a limited company, in the same time providing organisational flexibility offered by the partnership model
  • Members of LLP have limited liability for LLP debts to the extent of their capital contributions
  • Members are free to take part in management of the business

Disadvantages

  • LLP is not subject to double tax treaties
  • Annualy required to prepare and submit financial accounts
  • If the company operates outside the UK, no VAT number can be obtained

Taxation

Although in general law a LLP is regarded as a body corporate, for tax purposes a LLP is normally treated as a partnership.

Where an LLP carries on a trade profession or other business with a view of profit:

  • all the activities of the LLP are treated as being carried on in partnership by its members
  • anything done by, to or in relation to the LLP for the purposes of, or in connection with, any of its activities is treated as done by, to or in relation to the members as partners
  • the property of the LLP is treated as held by the members of the LLP.

LLP will normally be regarded as transparent for tax purposes and each member will be assessed to tax on their share of the LLP income orgains as if they were members of a general partnership governed by the Partnership Act 1890.

Each registered partner is taxable on the income they derive from the LLP as self- employed trading profits notwithstanding the fact that the registered member may have been a salaried partner (an employee) in a predecess or general partnership.

Every partner must register for Self-Assessment with HM Revenue and Customs (HMRC).

There are two exceptions to the normal rule that are followings:

  • the LLP does not carry on a business with a view to profit (some members clubs or societies fall within this narrow category)
  • the LLP is in liquidation or is being wound up by the order of the Court.

In these circumstances the LLP will be regarded as a body corporate for the purposes of the Tax Acts and will itself be chargeable to corporation tax on its taxable profits or gains.

Company formation conditions

NameCompany name needs to end with ''Limited Liability Partnership”' or ''LLP''
Limited use for same words like ''International'', ''Holding'', ''Building Society “, Group'', ''National'' etc.
Registered AddressRequired in UK
CapitalNot minimum required
PartnersMinumum two partners, can be corporate or individual person

How to order a company formation

1. Read carefully the information available in our website regarding company formation, taxation, costs etc.

2. If you have any questions, fill in the online form Ask an expert found in the Contact page or call us +(44) 7 929 207 667

3. Using our e-mail address consult@bbp-net.com write what you are interested in

4. If you would like to register a new company we will send you via e-mail an order form that will need to be completed

5. After we receive the completed order form, we will inform you about the required due diligence documents and send you invoice for payment

 

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