What is a Limited Liability Partnership? LLP Creation Advantages and LLP Benefits - Establish an LLP Online
: Form and register your limited liability partnership (LLP) online with Coddan business registered agent online - London based LLP registration agent with a high reputation worldwide, with low-costs, and affordable prices. Free UK LLP company formation name check, VAT registration, bookkeeping, accountancy and audit services for UK registered limited liability partnerships. The LLP is required to place documents (excluding the partnership agreement) on public file with the Registrar of Companies. The Companies House issues an incorporation document stating the LLP's registered name and registration number. Its address (registered office address), the names and addresses of the first members (partners), the names and addresses of the designated partners are held on public file. There are also annual filing requirements similar to those imposed on a private limited company. The partners may be of any nationality and they may be natural persons or corporate bodies, also like a partnership, tax is imposed on the members not on the LLP itself. Interestingly, if the partners are non-residents of UK, their income from the LLP is not subject to UK tax. The United Kingdom has many double tax treaties, however, access to treaty benefits for UK LLPs is determined by the residence of members. If the members are overseas in other offshore jurisdictions such as the BVI, Nevis, Panama or Seychelles then no double tax treaties exist.
Quick Online and Cost-Effective Limited Liability Partnerships (LLP) Start-Up an LLP Registration in England, Wales, Scotland, Northern Ireland, Offshore and in the USA
: We provide online quick, reasonable, and budgeted LLP limited liability partnership incorporation, LLP registration, and establishment in different countries, including the United Kingdom; we can offer you ready-made and off-the-shelf LLPs, bookkeeping & accounting services for a new or already incorporated limited liability partnerships; legal tax planning, tax filing and a wide range of corporate services. We also provide registered office addresses in different locations (across the United Kingdom, USA and offshore locations), a virtual office address, mail and call forwarding, call answering; assistance with the opening of an offshore accounts or UK banking accounts for our British and overseas customers. Our team of tax-advisors and LLP incorporation consultants will be pleased to assist with your enquiries related to registering and maintaining limited liability companies and partnerships or creating complex corporate legal and tax-savings structures, we may also offer free advice how a limited partnership is different from a limited liability partnership. Our great value UK LLP incorporation price starts from just £125.00, we consistently provide quality assistance and the best service to satisfy our valued customers - you will receive the personalised telephone and e-mail help that you really need!
Incorporate and Register a Limited Liability Partnership - Coddan CPM: LLP Formation Agent vs. Companies House
: LLP incorporations can only be submitted electronically online through suitably enabled software however, many incorporation agents and software providers have developed their systems to the point where they are able to offer customers a web-based electronic service (this is chargeable). This means that occasional as well as regular customers can apply for online LLP registration. Many of the businesses shown on Companies House' list of software suppliers provide web-based services and depending on the volume of filings you anticipate making, it may be more practical for you to use their services. Electronic applications are processed faster than those filed on paper, Companies House aim to process electronic documents within 24 hours of receipt. The new form of limited liability partnership (LLP), created in 2000, is similar to a US LLC in being tax neutral: member partners are taxed at the partner level, but the LLP itself pays no tax, it is treated as a body corporate for all other purposes including VAT.
Coddan CPM LTD' electronic filing software has been authorised by Companies House (Companies Registry, Secretary of State) is an executive agency of the United Kingdom Government Department of Trade and Industry (DTI), and you can find our Coddan company in the list of certified providers at Companies House web site. If you will place an LLP incorporation order with Coddan, the formation of a limited liability partnership usually takes as little as four to six hours from the time that your application and payment are received by Coddan. We will file your application electronically with Companies House allowing the fastest possible registration. This generally means that if you place an order before 11 a.m. (London time) on a normal working day, your company will be registered by the end of that day. Our LLP order and payment forms have security measures in place to protect the loss, misuse, and alteration of the information under our control. We use a Secure Socket Layer (SSL) server, which provides the strongest 2048-Bit and SHA-2 encryption, so the data will be sent and is able to be viewed only by ukincorp.co.uk.
Register, Form or Create an LLP in the UK, Offshore or USA Online or Visiting Our Office in London
: The UK, USA and offshore-registered LLP can be used for a varied of business activities on behalf of both the UK and non-UK owners, and we are pleased to advise you on the unique environments of your case. At the time of your LLP incorporation and registration or at any time thereafter, Coddan can be appointed as your nominee member (partner), we can also provide a full range of professional services from provision of a registered office address (we offer a prestigious address in three different locations in London, Cardiff, Bristol, Birmingham, Liverpool, Manchester, Sussex, Edinburgh and in Glasgow), UK local and toll-free telephone numbers, general mail-forwarding, mail scanning, telephone answering and phone calls forwarding, domain names registration; bookkeeping and preparation of management accounts for the UK and offshore incorporated limited liability partnerships; preparation and filing of statutory accounts, preparation and filling the LLP's annual return; advice and assistance to businesses in relation to the opening of bank accounts in England, Wales, Northern Ireland, Scotland, and in tax-free jurisdictions. We can also arrange a help with the notaries' legalisation, consular and apostille certification. You can see a description of our packages, and compare them, by choosing from the appropriate list below. If you will see something unclear in packages' description, please do not hesitate to contact us for more information.
Further information
Registration Procedure for Each Legal Form. Procedure for English limited liability partnership formation, how to register a limited liability partnership United Kingdom, and setting LLP London procedure. Types of LLPs formation procedures. Branch of a Foreign Company start-up process. Offshore LLP registration services, formation of Gibraltar companies, BVI company set-up, nominee directors, nominee secretary and nominee shareholder service. The companies and allied matters act and incorporation procedures. LLP incorporation should be quick and painless - whether you are an accountant for whom company formation is a frequent activity or an individual ordering your first UK LLP registration. We were the first formation agent in the world to offer a complete online limited liability partnership incorporation service and we continue to refine our ordering system, which has been widely praised for ease of use.
If you want to become familiar with the description and the contents of limited liability partnership formation packages, offered by Coddan CPM LTD and to find above, what kind of service is included in this or that formation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the LLP incorporation within United Kingdom, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen. All of our Memorandum and Articles of Associations and Partnership Agreements were reviewed and approved by a volunteer U.K. lawyer. This package offers fast electronic LLP registration documents and like all of our UK formation products is usually completed with in five days.
Our Economy LLP creation service not only have a Certificate of Incorporation on the required legal paper, but also has the provision of having your LLP registered office at our prestigious City of Liverpool, Manchester or London address. As all literature and documents must display the LLP registered office, having your registered office at our address can enhance your LLP's profile in the eyes of both customers and suppliers. Coddan offer a wide range of offshore company formation options. An increasing number of people choose the offshore formation option as their favored trading vehicle. Companies, large and small, are frequently based offshore.
We provide a broad range of corporate services including Corporation and LLC, LLP formation services in all 50 states, Trademark Registration Services, Registered Agent Services, Corporate Kits and Seal Embossers, plus many other affordable services that will assist in your company's development.
Moving forward, we help businesses of all sizes harness the convenience and affordability of online incorporation and we continue to execute on our vision to be the most reliable and cost-effective incorporation service online. We understand the challenges involved with starting a new business. That is why we promise to provide the most reliable and lowest cost incorporation service online. We also understand that you may have questions about incorporation. Our specialists are here to assist you with any questions that you may have before you decide to incorporate. Let us show you why Coddan is the best choice for your new business.
Whether you're starting your own small business or opening a branch office for a major corporation we'll make the process fast and simple for you. Your Office USA offers an array of workplace solutions to support your office needs - from full service offices to telephone answering services, conference rooms, and full receptionist & administrative support services.
It is the mission of YOUR OFFICE USA to allow clients to focus on developing and growing their business by providing the latest communication tools, flexible office space, meeting facilities and administrative support in a pleasant, productive, professional environment. Virtual Office Services - for those in need of a business presence without the expense of traditional office space. Let us provide you with a professional image while you work from home, from another state or even another country. We can answer your phone and forward your calls, receive your mail and provide conference rooms for those times when you need to meet with a client. The newest type of structure which is now available in all 50 states including the District of Columbia. The LLC combines the pass through taxation advantages of a partnership or S corp.
and the limited liability aspect of a corporation. The main differences between the LLC and the corporation is that LLC cannot have or issue stock and in some states the LLP can only exist for a maximum of 30 years. A Delaware corporation or LLC can be filed the same day the order is placed with receipt of your paperwork in approximately 7-10 business days. Starting new companies benefits, how to form a new business entity, benefits establishing UK enterprise, private companies advantages.
Running a business involves risk - the risk that the business may either succeed brilliantly or fail miserably. Or neither. The upside is high - financial and (perhaps) time freedom; independence; unlimited earning capacity. The downside is equally steep, just in the wrong direction - potential financial ruin if you've staked everything you own on your business's ultimate success and thrown your career down the proverbial to boot.
If you're running your business as a sole proprietorship or a general partnership, make no mistake - everything you own is on the line. A limited partnership will protect the limited partners from personal liability beyond the extent of their capital contribution to the partnership, but limited partners cannot participate in the management and control of the business so that's not a good option for most of you reading this article. Needing to control and manage your own business is most likely non-negotiable. When you form a corporation.
Start Your Own Corporation, Limited Liability Corporation and winning Partnerships. Related Articles: Should Your Small Business Become an S Corporation? Should You Incorporate Your Small Business? Disadvantages of Incorporating A Small Business. How to Incorporate Your Business? Benefits of incorporation include greater tax deductions for the business, your employees, and potentially for family members of business owners.
Even if you are the only shareholder and employee of your business, benefits such as health insurance, life insurance, travel and entertainment expenses may be deductible. Incorporating may also eliminate self-employment taxes and lower payments for social security tax and Medicare tax. Your individual tax liability may also be reduced, as you will become an employee of the corporation.
This is our most popular package with UK residents, and includes: -
The registration of your LLP from scratch using your own registered office address, and appoint your own candidates to the roles of members and designated members;
The standard capital on formation is £1,000, this is divided into 1,000 membership certificates valued at £1.00 each (it is not required to have all of the certificates issued, but a minimum of two certificates must be issued);
The formation of a limited liability partnership usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for LLP incorporation is included in the price of this package;
The following documents, which need to be printed and signed, will be emailed to you upon incorporation of your LLP: -
A certificate of registration (requires PDF file reader);
The partnership agreement (requires MS-Word file reader);
The first meeting of the board of members (requires MS-Word file reader);
Membership certificates and an LLP register.
Premier Package
£ 175.00
Annual Maintenance Fee £50.00
This is our most popular package with EU residents, and includes: -
The registration your LLP from scratch using one of our registered office addresses, and appoint your own candidates to the roles of members;
The standard capital on formation is £1,000, this is divided into 1,000 membership certificates valued at £1.00 each (it is not required to have all of the certificates issued, but a minimum of two certificates must be issued);
The incorporation of a limited liability partnership usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for LLP incorporation is included in the price of this package;
The provision of a registered office address in London for 12 months is also included in the price of this package (our registered office address service is charged annually);
The following documents, which need to be printed and signed, will be emailed to you upon setting-up of your limited liability partnership: -
A certificate of registration (requires PDF file reader);
The partnership agreement (requires MS-Word file reader);
The first meeting of the board of members (requires MS-Word file reader);
Membership certificates and a LLP register.
Deluxe Package
£ 525.00
Annual Maintenance Fee £400.00
This LLP start-up package is our most popular package with international customers, and includes: -
Incorporation of your limited liability partnership from scratch using one of our registered office addresses, our two nominee designated members;
The standard capital on formation is £1,000, this is divided into 1,000 membership certificates valued at £1.00 each (it is not required to have all of the certificates issued, but a minimum of two certificates must be issued);
The formation of a limited liability partnership usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for LLP incorporation is included in the price of this package;
The provision of a registered office address in London for 12 months is included in the price of this package (our registered office address service is charged annually);
The provision of two nominee members for 12 months are also included in the price of this package (our nominee members service is charged annually);
The following two hard bound copies of corporate documents, will be posted to you upon formation of your LLP: -
A laminated copy of the certificate of registration of your LLP;
A hard bound copy of the partnership agreement;
A hard bound copy of the minutes of the first meeting of members;
Membership certificates, and your LLP register;
The power of attorney signed by nominee members;
Pre-signed, undated resignation letters from nominee members;
The agreement for the provision of nominee service and indemnification of nominee.
LLP Creation Checklist: Legal Requirements
Limited liability partnerships are not a separate entity for the income tax purposes. Profits and losses are passed through directly to the LLP' partners.
Typically, an LLP' partner is only personally liable for his or her own negligence or that of an employee working under the partner's direct supervision. The partner is not personally liable for the negligence of anyone else in the limited liability partnership.
A limited liability partnership in England, Scotland and Wales must have at least two members.
An LLP' partners (members) can be individuals or corporate (another company, partnership, trust or foundation) bodies.
The Companies and LLP Acts impose no restriction on the minimum age of LLP' members. However Companies House will actively discourage the appointment of anyone under the age of 16 from taking up an LLP membership on the grounds that the individuals concerned may not fully understand the legal liabilities that go with the position and for the most part will not have the experience necessary to perform the duties of an LLP membership.
Under the Companies and LLP Acts, there is no restriction on any or all of the members/partners being from an overseas country (i.e. outside the United Kingdom in terms of residency, domicile, citizenship, place of incorporation or all or any of those concepts).
There is no requirement for the members of your LLP to be UK citizens or residents, nor for them to hold valid work permits.
Owning, or being a member of a UK LLP does not, however, grant you any right to live or work in the UK if you are a foreign national.
Your LLP must have a registered office address within England or Wales; this is the official address of your partnership and will be on the public record as such.
Your partnership must hold its official LLP' documents at its registered office address: its register of members, and its constitutional documents.
So long as you maintain a registered office address in England or Wales, you can conduct your business from any place in the world: you do not have to run your business from your registered office address.
An LLP must exist for business purposes - it is a for-profit legal form. A limited liability partnership can hold property; can borrow money in its own name.
LLPs that do not carry on business as a trade or profession such as an investment company will be subject to corporation tax.
STARTING A LIMITED LIABILITY PARTNERSHIP: ORGANIZING A UK LLP: STEPS TO START A GREAT BRITAIN LLP, REGISTERING LLP IN ENGLAND - FORMING LLP IN THE UNITED KINGDOM
The limited liability partnership (LLP) is essentially a general partnership in form, with one important difference. Unlike a general partnership, in which individual partners are liable for the partnership's debts and obligations, an LLP provides each of its individual partners' protection against personal liability for certain partnership liabilities.
The key advantage of an LLP compared with a traditional partnership is that the members of the limited liability partnership (it is very important that they should not be called 'partners', but - 'members') are able to limit their personal liability if something goes wrong with the business, in much the same way as shareholders in a limited company have always been able to do. Of course anyone lending money to the LLP such as a bank may still require personal guarantees from the members, as they frequently do with shareholders in a private limited company. We recommend reviewing this site in its entirety, so that you are knowledgeable of the UK jurisdiction and the powers granted to British limited liability partnerships.
Where business owners have wanted to limit their personal liability in the past, they have normally set up companies and any profits made by those companies are subject to corporation tax. Dividends paid by the companies can then be taken as income of the shareholders. LLPs are taxed quite differently in that the profits are treated as the personal income of the members as if they had run their business as a partnership. The taxation of companies and partnerships is very different but taxation should not be the main consideration in choosing a business vehicle. However, we would be very pleased to discuss the impact of this in any particular case.
LLPs must produce and publish financial accounts with a similar level of detail to a similar sized limited company and must submit accounts and an annual return to the Registrar of Companies each year. This publication requirement is far more demanding than the position for normal partnerships and specific accounting rules may lead to different profits from those of a normal partnership.
LLP Registration With Companies House or Why to Register an LLP With Coddan
General Advantages of the UK Limited Liability Partnership: -
1. Liability is, in the vast majority of cases, strictly limited to the investments made by the members. 2. LLP' members are not personally liable for their actions unless there is a clear and serious breach of their fiduciary duty. 3. The liability of the members of a limited liability partnership is limited to the amount of their contribution, which may be as little as £1.00. 4. Limited liability partnerships are not subject to corporate income tax. The Limited Liability Partnership Act confers the same tax transparency as for partnerships: members are considered self-employed for tax purposes. 5. The rights of members (partners) are normally clearly defined and protected. 6. Members may be residents outside of the United Kingdom. A minimum of only two members is required. Members may reside anywhere in the world and may be bodies corporate registered in the UK or elsewhere. 7. As a separate legal entity, a limited liability partnership may own property, sue, and be sued. 8. The structure of a limited liability partnership is more suitable for a group of people engaging together in a property or finance venture where it may be necessary to account for partners coming and going more frequently than you would expect in a normal partnership business. 9. After a limited liability partnership is registered, there are no obligations for it to start trading within a specified time period. 10. A limited liability partnership provides a more flexible management structure.
Personal service - Coddan retained the high quality advisors who are extremely knowledgeable and true professionals in both of UK and offshore legal LLP structures and tax law aspects. Coddan's advisers can provide customers with free and confidential advice and information on starting up a business in England, Northern Ireland, Scotland, and Wales; and in the Island of Man.
If you would like a personal face-to-face consultation and dedicated help with your UK or and offshore LLP start-up package or needs, call us on +44 (0) 207.935.5171, or 033 0808-0089 to discuss your requirements and make an appointment with one of our consultants. Our trained business consultant will contact you at a pre-arranged appointment time to discuss your individual circumstances, as well as your suggestions in relation to your LLP registration needs. Our project begins with a short meeting, where our advisors gather the information required to incorporate a limited liability partnership for an each client. The result includes personal assistance with the order form submission, usually completed in four-to-six business hours, an electronic copy of LLP documents and further legal documentation printed on the same day.
If you have questions about legal aspects of your limited liability partnership registration application, you should speak to one of our consultants. We are very happy to provide a practical support, we have a team of professional business advisers and consultants who can support you to strengthen and grow your business. Main reasons to register a limited liability partnership (LLP) with us: -
We have the professional knowledge and qualifications;
We have the experience;
We have been in the business for over 18 years and we intend to stay for much longer;
We work in a confidential manner;
We are multilingual;
We offer a personal approach that is custom-designed to your requirements;
We are committed to our clients;
We are committed to providing high quality service;
We take our compliance and legal obligations seriously;
We respond very promptly to all enquiries and problems;
As a company processing your personal data, we are regulated by the Data Protection Act;
We do not disclosure your personal data to any third party;
Coodan is a fully fledged, innovative firm located in London, and governed by the English law;
Our businesses incorporation software has been authorised by Companies House;
We comply with Companies House and HMRC regulations;
Our Chartered Certified Accountants, business advisors, and tax-planning specialists are regulated by ACCA (the Association of Chartered Certified Accountants);
We are committed to helping you achieve your objectives;
Our main office building is located in central London on 124 Baker Street;
We will see you, for free for an initial half hour meeting at our office;
Alternatively, we encourage international customers to call or e-mail us, as we don't always need to meet face-to-face to act on your behalf to register or maintenance a limited liability partnership in England, Scotland, Wales, Northern Ireland, Isle of Man, Belize, British Virgin Islands, Seychelles, etc.
In addition, we can cover, inter alia, the following matters: -
Administration of LLPs;
Agency and distribution agreements;
Banking/lending/security;
LLPs acquisitions and sales;
LLPs and business formations;
Company schemes;
Contracts for supply;
Members' responsibilities and dties;
Employment;
IT Contracts (software licenses, maintenance agreements, etc.);
Licensing agreements;
LLP members' agreements;
Partnership dissolution/winding-up/liquidation;
Pension schemes;
Re-organisation/restructurig of companies/partnerships;
Data protection issues.
Starting Business Through a UK LLP: Quick and Cheap Online LLP Registration and Establishment
Coddan is the UK business entities (Ltd, Plc and limited liability partnership) registration agent and certified accountancy firm with many years experience in assisting clients with business incorporation in the United Kingdom (England, Wales, Scotland and Northern Ireland), offering in most circumstances the same-day online limited liability partnerships incorporation services for the UK residents & non-UK based customers. Our expert knowledge and extensive experience of setting-up of private small businesses and LLP' structures has made us possible to provide the very professional, prompt, and efficient businesses entities and firms incorporation level of services.
Our team of tax-advisors and business incorporation consultants will be pleased to assist with your enquiries related to establishing and maintaining limited liability partnerships or creating more complex corporate legal and tax-savings structures. On our web site, you will find a number of useful tips and information, which may help you to learn what to take into consideration when deciding among setting-up LLPs, establishing limited partnerships and other business structures. Our great value LLP formation price starts from just £125.00, we consistently provide quality assistance and the best service to satisfy our valued customers - you will receive the personalised telephone and e-mail help that you really need!
Coddan help lines provide confidential advice, support, and access to pastoral care for business consultants and accountants. Our team of friendly staff (who are all convincing specialists) is on hand to ensure that your move goes through as smoothly and swiftly as possible.
Confidential advice and support services have been provided from our premises in 124 Baker Street, London. We are committed to providing a comprehensive range of services and ensure that we offer a service that blends professionalism with a friendly, informal approach. By doing so we remove the mystique that sometimes surrounds our profession. We believe that each client has an individual and specific legal requirement and therefore provide a prompt and professional service, which is individually tailored to the particular needs of each client. By doing so, we are able to advise and assist in a clear, direct, and cost effective manner.
LLP Formation Service
What does limited liability partnership stand for? What is the difference between an LLC and LLP? The LLP must have at least two members in the partnership, which can be resident anywhere in the world. The members can be natural persons or corporate bodies. A limited liability partnership is a relatively new creation that operates much like a limited partnership, but allows the members of the LLP to take an active role in the business of the partnership, without exposing them to personal liability for others' acts except to the extent of their investment in the LLP. All profits in a limited liability partnership are split between the members. The tax liability falls on the individual members, not the limited liability partnership itself. Most members are likely to be self-employed, so all income should be declared via self-assessment. We provide a fast online service for UK LLP registration, including incorporation in England, Wales, Scotland, and Northern Ireland. Choosing a structure for your business can be a confusing puzzling of terminologies. However, with this basic guide, you will be able to select the structure that will serve your business best at tax time. We would like to recommend you to get a professional legal and tax advice from one of our consultants before a final choice of business entity will be made. There are several types of legitimate commercial and non-commercial legal entities which you can choose to operate as. Find out the links below on the pros and cons of registering your business.
Coddan is one of the leading service providers in the field of English, Scottish, Wales and Northern Irish LLPs formation and registration. We can help you in starting a limited liability partnership in England & Wales Scotland, Northern Ireland and Republic of Ireland. Over 95% of our UK LLPs are incorporated within 4-6 hours. The electronic submission of information enables a fast limited liability partnership start-up satisfying all of the required legal formalities: a member, a designated member, and a registered office address. Our electronic filing software has been approved by Companies House. Companies House (Companies Registry, Secretary of State) is an executive agency of the United Kingdom Government Department of Trade and Industry (DTI).
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Our current £125.00 Economy package is also comes with the special drafted and solicitors adopted partnership agreement, which can be used not only in the United Kingdom, our own version of an LLP partnership agreement will be very useful and accepted in other overseas countries. We also provide the certificate of registration, minutes of the first meeting of members (partners), membership certificates, and a partnership register, etc.
Our business is international - we offer a wide range of legal LLP registration services to multinational, public & private clients and entrepreneurs in industries and public actions. Our firm deals with transactions of all sizes and complexity combining global and local expertise on behalf of clients in the UK, including Northern Ireland, Republic of Ireland, and Isle of Man, & around the world. In addition, we also advise foreign customers on doing business in England, Wales, Scotland, Northern Ireland, Republic of Ireland, Isle of Man and in other offshore countries. We can provide you with a wide range of LLP-related legal advice covering all aspects of the start-up, trading activities and business expansion in the UK and overseas as well as realising value.
We provide different LLP incorporation packages with the different options depending on your business needs; each package offers the complete incorporation of a limited liability partnership, which is usually ready to commence trading within six to eight hours. Our packages offer the perfect results for those people who are taking the first step into the business or smaller LLPs whose budget won't stretch to bespoke business solutions, there are no dumbfounds and no hidden charges, - what you see is what you pay!
We can also assist clients with the special needs or requirements, we could make a tailor made package that would suit your personal needs and wants. If you choose us as your LLP corporate service provider, you will almost immediately realise that our team of proficient advisors, is your own dedicated support team.
Limited liability partnership registration documents submitted electronically, which allows us to offer you a timesaving service and eliminate the necessity to complete the paper forms, sign them by your partnership officers, and certify by a solicitor or notary public. Our services include assisting you on: -
Online limited liability partnership (LLP) formation and registration;
Members (partners) duties, partnership governance and protecting your designated members against liability;
Debt and equity funding initially and for ongoing expansion;
Inward and outward investment, including entry strategy;
Supply of goods/services and other commercial contracts;
Franchising, distribution, agency and commissionaire agreements;
Joint venture, collaborations and strategic alliances (both UK and international); and
Implementing an exit or succession strategy to meet your needs.
Our flexible, relationship-based model facilitates our collaborating with you to truly understand your objectives and help you attain them. We tailor our services and approach to meet your needs.
Set-Up and Register a Limited Liability Partnership - Coddan CPM: LLP Registration Agent vs. Companies House
There are two ways to incorporate and register an LLP: -
UK LLP Software Electronic Filing LLP incorporations can only be submitted electronically online through suitably enabled software however, many incorporation agents and software providers have developed their systems to the point where they are able to offer customers a web-based electronic service (this is chargeable). This means that occasional as well as regular customers can apply for online LLP incorporation. Many of the businesses shown on Companies House' list of software suppliers provide web-based services and depending on the volume of filings you anticipate making, it may be more practical for you to use their services. Electronic applications are processed faster than those filed on paper. Companies House aim to process electronic documents within 24 hours of receipt. You can find more information about software filing and a list of providers on Companies House website.
Coddan CPM LTD' electronic filing software has been approved by Companies House (Companies Registry, Secretary of State) is an executive agency of the United Kingdom Government Department of Trade and Industry (DTI), and you can find our company in the list of certified providers at Companies House web site. If you will place an LLP incorporation order with Coddan, the formation of a limited liability partnership usually takes as little as four to six hours from the time that your application and payment are received by Coddan. We will file your application electronically with Companies House allowing the fastest possible registration. This generally means that if you place an order before 11 a.m. (London time) on a normal working day, your company will be registered by the end of that day.
LLP registration can sometimes take slightly longer. Although the majority of limited liability partnerships are incorporated within a maximum of 24 hours, there may be occasions where the process takes longer due to circumstances beyond our control. Please note that, although your LLP will generally be registered in four to six hours, the preparation and delivery of your partnership documents typically takes slightly longer. As soon as we will register an LLP for your behalf, the following documents, which need to be printed and signed, will be emailed to you upon formation of your LLP: a certificate of registration (PDF), the LLP partnership agreement (MS Word), the first meeting of the board of members (MS Word), membership certificates and a partnership register. Additional printed and bound copies of our limited liability partnership documents can be provided, either at the time of original LLP incorporation, or at a later date.
UK Limited Liability Partnership Paper Filing Companies House is not yet able to incorporate a UK limited liability partnership (LLP) electronically. Companies House aim to process standard paper documents within 5 days of receipt. Cheques should be made payable to Companies House. When filing 'Same Day' applications by post, courier or by hand please ensure that you clearly mark the envelope 'Same-Day LLP Incorporation'.
Paper filings, which must be sent to the appropriate office, take longer to process than those submitted electronically. You can incorporate an LLP yourself or you can use a company formation agent, such as Coddan CPM, accountant or solicitor. You need to complete an 'Application to register a limited liability partnership' - form LL IN01 and send this together with the fee to Companies House. The form LL IN01 is available on Companies House website. Companies House does not provide or issue an LLP partnership agreement, the first meeting of the board of members, membership certificates and a partnership register, Companies House only register your LLP incorporation forms at their register, which is all they will do for you.
United Kingdom Limited Liability Partnership Advantages & Disadvantages
British limited liability partnerships (LLP) is an alternative corporate business vehicle that gives the benefits of limited liability but allows its members the flexibility of organising their internal structure as a traditional partnership. It has both corporate and partnership characteristics. Despite the advantages of a partnership, the unlimited nature of partners' liability in an increasingly litigious world has prompted the arrival of limited liability partnerships.
The LLP is a type of business vehicle which is new to the United Kingdom, although it is well established in the USA and has been available under legislation in Jersey since 1996.
First, since aggrieved creditors or investors of a failed LLP may seek redress against the LLP's members or its auditors, it was felt by many in the audit profession that they, who are likely to carry substantial professional indemnity insurance, were being specifically targeted by litigants regardless of the level of their fault for the loss claimed. The cost to firms of defending actions rose sharply in the decade as did the cost of insurance. Secondly, under English and Scottish partnership law, each partner is jointly and severally responsible for the liabilities of the firm.
In the light of the increasing level of risk, it became harder for many in the larger firms to reconcile their firms' increasing size and specialization with the traditional partnership structure, in which all partners are agents of each other. Many felt that to require each partner in a large, highly specialised firm to accept unlimited financial responsibility for the actions of his or her partners had become an unrealistic proposition. It was speculated that, given the huge sums which were increasingly involved in negligence claims, the continuing exposure of partners to joint and several liability could deter the most talented young accountants from entering the audit profession. Were this fear to be realised, it could, in the long term, damage the quality of UK auditing and, in turn, the whole of the financial services sector.
Towards the end of 1996, the then President of the Board of Trade, following concerted lobbying by large audit firms, committed the government to bringing in a law to establish the LLP as a means of addressing these concerns. On the change of government in May 1997, the incoming Labour administration adopted this plan and the work on drafting LLP legislation continued without interruption. There has been extensive consultation with interested parties during the drafting process. The most important change which resulted from the consultation was to abandon the government's original plan to restrict access to the LLP structure to large, regulated, professional firms.
The presumption behind this proposed restriction was that, since it was the large, professional firms that had lobbied hard for the creation of the LLP, only firms in that sector needed to be considered as possible adopters of the new vehicle. It soon became apparent, however, that it would be unfair and restrictive to limit access to the new legal entity to firms with more than twenty partners and firms that conducted a particular line of business. It was, accordingly, agreed that the right to set up an LLP should be extended to firms of all sizes and which carried on business of any lawful type.
An LLP is a corporate entity with its own separate and distinct legal existence, like a company. It is the LLP, which enters into legal agreements, not the individual members. For taxation purposes, the members (and not the LLP) are treated as if they were carrying-on the business personally and taxed as self-employed. They are also treated as owning the assets of the business personally. A limited liability partnership may be formed by two or more persons (individuals or companies, and not necessarily United Kingdom resident) to carry-on a trade or business.
To form an LLP, the partners have to file an incorporation document at Companies House. The owners and managers of an LLP are the same. The LLP management structure and relationship between the partners are a matter for agreement between them and may be recorded in a separate LLP agreement, similar to a partnership agreement.
English, Wales, Scotland and Northern Irish LLP's Advantages
No personal liability on a member for the LLP's debts and contracts, no joint and several liabilities for the negligence of any member. Members' liability to contribute in a winding-up is limited to the amount they agree to contribute in the event of a winding-up as recorded in the LLP agreement. The limited liability partnership is a registered United Kingdom entity, which obtains a certificate of registration and a registration number from the Companies Registrar of England and Wales or Scotland.
Economy
Premier
Deluxe
English and Wales Limited Liability Partnership from only £125.00!
All inclusive limited liability partnership (LLP) registration. Each limited liability partnership package includes all statutory paperwork and is fully compliant with company and partnership law. All our limited liability partnerships are registered as general trading LLPs and can be used to conduct any type of business. A certificate of registration, the partnership agreement, and other relevant documents will be sent directly to you via e-mail immediately following the formation of your LLP. We will incorporate your LLP from scratch using your own registered office address, and appoint your own candidates to the roles of members (partners). Upon formation, these details will be recorded as the original details of your LLP. All government and filing fees are included in the cost of our packages. It will take just couple of minutes to complete the online registration form, then your limited liability partnership could be up and running within 4-6 working hours.
THE ECONOMY PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Laminated hard-copy of the certificate of registration - £5.95. 2. Hard bound copies of your partnership agreement (four different options) - £14.00. 3. Two membership certificates printed in an elegant format - £8.00. 4. Certificate of good standing - £35.00. 5. A partnership kit: register of members, and debentures, and a minute book - £40.00. 6. Partnership pliers seal - £20.00. 7. Partnership tailor-made rubber stamp - £17.00. 8. Domain name registration for two years - £16.00. 9. Notarisation & apostille certification of the LLP documents.
English and Wales LLP With a Registered Office Address in England For Just £175.00!
All inclusive limited liability partnership registration. Each limited liability partnership package includes all statutory paperwork and is fully compliant with company and partnership law. All our UK LLPs are registered as general trading partnerships and can be used to conduct any type of business. A certificate of registration, the partnership agreement, and other relevant documents will be sent directly to you via e-mail immediately following the incorporation of your LLP. We will register your limited liability partnership from scratch using one of our own registered office addresses in England, and appoint your own candidates to the roles of members (partners). Upon incorporation, these details will be recorded as the original details of your limited liability partnership. All government and filing fees are included in the cost of our LLP registration packages. It will take just couple of minutes to complete the online registration form, then your LLP could be up and running within 4-6 working hours.
THE PREMIER PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. A laminated hard-copy of the certificate of registration - £5.95. 2. Hard bound copies of your partnership agreement (four different options) - £14.00. 3. Two memebership certificates printed in an elegant format - £8.00. 4. Certificate of good standing - £35.00. 5. A partnership kit: register members, and debentures, and a minute book - £40.00. 6. Partnership pliers seal - £20.00. 7. Partnership tailor-made rubber stamp - £17.00. 8. Domain name registration for two years - £16.00. 9. Notarisation & apostille certification of the LLP documents.
English and Wales LLP Registration with a Registered Office Address and Two Nominee Members For Just £525.00!
All inclusive UK LLP incorporation. Each limited liability partnership package includes all statutory paperwork and is fully compliant with company and partnership law. All our UK limited liability partnerships are registered as general trading partnerships and can be used to conduct any type of business. We will incorporate your LLP from scratch using one of our own registered office addresses in England; appoint our two candidates to the role of a nominee members (partners). Upon LLP incorporation, these details will be recorded as the original details of your limited liability partnership. All government and filing fees are included in the cost of our packages. The following documents, will be posted to you upon formation of your LLP: a hard bound copy of corporate documents includes: a laminated copy of the certificate of registration of your LLP, a hard bound copy of the partnership agreement, a hard bound copy of the minutes of the first meeting of members (partners), power of attorney, membership certificates, and your partnership register. It will take just couple of minutes to complete the online LLP registration form, then your LLP could be set-up and running within 4-6 working hours.
THE DELUXE PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. An additional laminated hard-copy of the certificate of incorporation - £5.95. 2. An additional hard bound copies of your partnership agreement (four different options) - £14.00. 3. Additional two membership certificates printed in an elegant format - £8.00. 4. Certificate of good standing - £35.00. 5. A partnership kit: register of members, and debentures, and a minute book - £40.00. 6. Partnership pliers seal - £20.00. 7. Partnership tailor-made rubber stamp - £17.00. 8. Domain name registration for two years - £16.00. 9. Notarisation & apostille certification of the LLP documents.
A limited liability partnership registered in the Great Britain is not itself liable to UK tax (unlike a limited company). If any partner is non-United Kingdom resident, then non-UK source income of the partnership is not taxable in the United Kingdom. If the management and control of the partnership is situated overseas, and the trade is carried on abroad, UK resident but non-domiciled partners will likewise not be liable to United Kingdom tax on partnership profits. United Kingdom limited liability partnership has fewer compliance and disclosure requirements than UK companies.
UK LLP's Disadvantages
Disclosure information (in particular accounts and an auditors' report) must be filed with the Registrar of Companies and becomes public. Regulation: auditing and filing requirements.
The key advantage of a LLP compared with a traditional partnership is that the members of the United Kingdom Limited Liability Partnership (it is very important that they should not be called partners but members) are able to limit their personal liability if something goes wrong with the business, in much the same way as shareholders in a company have always been able to do. Of course anyone lending money to the LLP such as a bank may still require personal guarantees from the members, as they frequently do with shareholders in a company.
Where business owners have wanted to limit their personal liability in the past, they have normally set up companies and any profits made by those companies are subject to corporation tax. Dividends paid by the companies can then be taken as income of the shareholders. LLPs are taxed quite differently in that the profits are treated as the personal income of the members as if they had run their business as a partnership. The taxation of companies and partnerships is very different but taxation should not be the main consideration in choosing a business vehicle.
English limited liability partnerships will produce and publish financial accounts with a similar level of detail to a similar sized limited company and will have to submit accounts and an annual return to the Registrar of Companies each year. This publication requirement is far more demanding than the position for normal partnerships and some specific accounting rules may lead to different profits from those of a normal partnership.
UK Limited Liability Partnership Corporate Characteristics
Corporate characteristics: -
An LLP is a body corporate, a legal entity in it's own right with it's own assts and liabilities, separate from its members.
An LLP members have limited liability in the same way that shareholders have in limited liability companies.
Contractual arrangements bind the LLP not the members, and in the event of negligence or other torts by other members (or employees) are not jointly or directly liable.
Members may be liable for their own negligence or other torts like company directors if claimants can show they entered into arrangements relying personally on the member as well as the LLP.
Suitably worded engagement letters may be able to control such exposure.
Third parties can assume members are authorised to act on behalf of the LLP and a member is still a member unless the third party has had notice or notice been delivered to the Companies Registrar.
Floating charges can be created on the LLP.
LLPs must file accounts at Companies House showing a "true and fair view" according to generally accepted accounting standards.
No restriction on partner numbers.
The provisions of the Companies Act and the Insolvency Act apply to LLPs in the same way as for limited companies. For instance: the rules concerning fraudulent and wrongful trading, disqualification of directors and insolvency and winding-up procedures.
UK Registered LLP is not an Ordinary Partnership
An LLP is a new species of company, with 'members' and a constitution. The LLP needs to be registered at Companies House like a limited company, owns assets and contracts with the outside world in its own right.
But there are numerous differences between an LLP and a limited company. It is not bound by the wide range of management requirements, arrangements for meetings, voting rights and so on which apply to a company: the members can draft a constitution which is simpler and suits the way the business actually works. LLPs are not obliged to have directors and all members can take part in management unless they agree otherwise. Like a partnership, all members are agents of the LLP and when a member leaves a simple notice filed at Companies House it is notice to all the world that he or she is no longer a member.
LLPs are obliged to file returns and at least one member has to be 'designated' as the person responsible for the filing requirements - like a company secretary. As with companies, LLPs have to file accounts, which must be audited, subject to the same exemptions as apply to small companies and disclosure has to include the amount of profits attributable to the highest paid member and the home addresses of members. There have been some concerns expressed at these last two requirements.
Which Form of Business Entity to Choose?
The decision as to the form of business is very important. It can be costly and time consuming to change the form of a business once it is established. The decision should be incorporated in any business plan, factors which are relevant in making the final decision include: -
Limited Liability
If the business itself is a high-risk business which may give rise to expensive legal action, e.g. the building trade, limiting the liability of the persons involved in it may be important, and a limited company the most appropriate form of business.
Size
The estimated level of turnover will be one important factor in determining the most tax efficient form of business.
Outside and Inside Investors
The nature of investment in the business is another factor to be considered. If there is to be an outside investor then a limited company may be best. If the people carrying on the business are also the investors in the business, then a partnership may be more appropriate.
Limited Liability Partnership' Members
The "members" of the LLP are the individual persons through whom the LLP operates. The term as it is used in the context of LLPs should not be confused with its meaning in the context of limited companies, since the member of an LLP will invariably have management as well as ownership rights. The legislation does not give a great deal of guidance as to the overall legal responsibilities and duties of members, other than to imply, by virtue of their status as agents of the LLP, that they owe fiduciary duties to it. The full extent of member' duties will, inevitably, fall to be clarified by the courts.
In relation to the specific areas of wrongful trading and clawback of withdrawals, referred to below, it is provided that the courts are required to assess a member's conduct in the light of the knowledge, skill and experience that may reasonably be expected of a person occupying that role. In the circumstances of these provisions at least, members will be expected to act in accordance with a legal benchmark of skill and care. The main issues associated with membership are as follows.
Appointment of Members
The first members of the LLP (as already stated there must be at least two of them and they may be individuals or corporate bodies) are those who are listed in the incorporation document as being its first members. Thereafter, the circumstances in which persons may become (and cease to be) members are left to be decided by the internal rules of the firm.
A member may cease to be a member in accordance with an agreement made with the other members or, in the absence of any agreement on the procedure to follow in this regard, by giving reasonable notice to the other members. Where persons either become or cease to be members, notification must be made to the Registrar within 14 days. Details of changes in the name or address of a member will need to be filed within 28 days.
Status of Members
The members of the LLP are, broadly, the equivalent of the partners in a partnership and the owner/managers of a limited company. Whereas partners in a partnership are (under English law) the agents of each other, members of an LLP are, expressly, agents of the LLP (s.6 of LLP Act). The members have a financial stake in the firm and, in the absence of contrary agreement, a right to participate in its management. Since the LLP, unlike the English partnership, has legal personality, it can and does act as a principal in agency terms. That it is possible for a member of an LLP to be an employee. In the case at hand, apart from not raising any concerns about his status at any time prior to his departure, the Chief Investment Officer (CIO) could not be treated as an employee because he/she: -
Had agreed to be bound by the LLP's members' agreement;
Was paid gross and he accounted for his own tax;
Was entitled to a discretionary distribution of surplus profit; and
Was entitled to share in the proceeds of a sale of the LLP or in its winding up.
What lessons can be learnt from this decision? If you are thinking about admitting new members to your LLP, you should make it clear to your prospective members, particularly those who are existing employees, that they will be losing their employment status and associated rights. In addition, it is important that such members are given sufficient "self-employed" attributes in order to reduce the risk that a court in future years finds that the member is in actual fact an employee and seeks to apply employment legislation, to the detriment of the LLP.
Although HMRC currently treat all members of an LLP as self-employed from a tax perspective, it is possible they may adopt a similar test to determine the true status of an LLP member. Given that often the main reasons businesses choose an LLP as the vehicle through which to operate are its tax transparency and the scope to make substantial savings on employers' national insurance contributions, it is important that a members' agreement identifies the "self-employed" attributes of the members accurately.
Each member of the LLP can, therefore, bind the firm. Under s. 6(2) of the LLP Act, however, the LLP will not be bound by the actions of a member if that member has no authority to act for the LLP in the respect concerned and the person they deal with either knows that they lack such authority or does not know or believe them to be a member of the LLP.
As far as third parties dealing with an LLP are concerned, a person who has ceased to be a member is regarded as still being a member unless the third party has had notice of such cessation or due notice of the member's cessation has been delivered to the Registrar as required. Thus, departing members should, in their own interests, make sure that proper notice is given. s.4(4) of the LLP Act provides that a member shall not be regarded as being an "employee" of the LLP unless, in the case of a converting partnership, he or she was regarded as being an employee of that partnership. The intention of this appears to be to ensure that a salaried partner of a partnership which converts to LLP status may continue to be deemed to be an employee.
UK Limited Liability Partnership' Designated Members
The term "designated member" is introduced by the Act to indicate the persons within the LLP who are to assume responsibility for certain statutory compliance functions on behalf of the firm. Designated members are responsible under the Act for putting their names to and/or filing a range of statutory documents, such as the annual accounts, the annual return and details of changes in membership. In this, their role will be comparable to functions carried out by the directors and secretary of a limited company. There must be at least two designated members in each firm: if the number falls below two, every member is deemed to be a designated member.
Where an LLP fails to comply with a specific obligation, in most cases both the LLP and its designated members will have committed an offence. Each LLP must, on incorporation, indicate which of its members is to hold the post of "designated member" (or state that every member is to be a "designated member"). Where individual members are specified at the outset, others may become designated members at any time by agreement with the other members. Details of resignations and appointments of designated members are required to be notified to the Registrar in an approved format within 14 days. (This does not apply where the LLP has declared to the Companies Registrar that all of its members are to be "designated members").
Shadow Members
The company law concept of "shadow director" is extended to LLPs. Thus, in the (perhaps unlikely) event that the members of an individual LLP are collectively accustomed to acting in accordance with the instructions of a particular person, that person will be deemed to be a "shadow member" of the LLP and will be subject to the same liabilities as members proper. A person who issues instructions purely in a professional advisory capacity will not be deemed to be a shadow member.
Disputes between Members
While the expectation is that LLPs will make their own arrangements to provide for dispute resolution, there are three residual statutory provisions in this regard. First, the regulations apply to LLPs sections Companies Act. These sections, as they apply currently to companies, entitle a member or members with a minority interest to petition the court on the ground that the affairs of their company are being run in a way which is unfairly prejudicial to their interests. If, on an application by a member or members of an LLP, the court finds in favour of the applicants, it may order, inter alia, the petitioning members' interests to be bought out or that a change be made in the LLP partnership agreement. Note, however, that members of an LLP can, by unanimous written agreement, determine to exclude the application of the sections concerned for whatever period they determine.
Conceivably, the exclusion could be of indefinite duration. Second, under a modified version of Companies Act, the Secretary of State may initiate a formal statutory investigation into the LLP's affairs on the application of 20% of the current membership of the LLP. Third, paragraph eight of the LLP Regulations states that no majority of members of an LLP may expel any member unless a power to do so has been conferred by express agreement between the members.
The LLP may notify the Registrar that all members of the limited liability partnership are designated members or that specified members will be designated; the effect will be as though this had been stated in the incorporation document. When a person ceases to be a member of the LLP, that person also ceases to be a designated member. The following functions may only be performed by, or are the responsibility solely of, a designated member or designated members of a limited liability partnership.
Signing the balance sheet in the annual accounts, filing annual accounts with the Registrar, signing annual return forms (and associated penalty for non-filing). Appointing the auditors, fixing the auditors' remuneration (members may determine another method of fixing remuneration), removing the auditors. Signing forms for voluntary striking off of limited liability partnership (and related duties assigned to designated members).
The duty to comply with an order for enforcement of delivery of documents to the Registrar, formal documents for LLP may be served on a designated member. Various functions under the Insolvency Act 1986 including: -
Giving a statutory declaration of solvency preceding a members' voluntary liquidation and making a statement of affairs in a creditor's voluntary liquidation.
A designated member in default is liable to a penalty in certain cases such as the failure of an LLP to change its name following a direction to do so and in relation to failures to carry out responsibilities as set out above.
Liability of Members and Designated Members
This issue can be looked at under three main headings: -
Financial liability;
Criminal and civil liability under the LLP Act and regulations;
Disqualification.
UK Limited Liability Partnership' Financial Liability: Members' Guarantees
s. 1(4) of the UK Limited Liability Partnership Act states that the members of an LLP have such liability to contribute to the firm's assets in the event of its winding up as is provided for in the Act. The LLP Regulations expand on this by modifying, in its application to LLPs, s. 74 of the Insolvency Act 1986. This modified section provides that, in a winding up, any present or past member is liable to contribute financially to the extent that they have agreed with the LLP or with other members. However, a person who has ceased to be a member will not be liable if the agreement between them and the firm exempts them from continuing liability.
Therefore, if the agreement between the members requires each to pay the £100 on the winding up, this is the amount which the law requires them to pay to the liquidator. To this extent, the position of the member as regards personal liability is comparable to that of the member of a company limited by guarantee. It will be up to each LLP, when drafting its own partnership agreement, to decide how it wishes to deal with this aspect.
Membership Falling below Two
By application of Companies Act, where an LLP continues for more than six months with a single member, that member becomes liable jointly and severally with the LLP for the debts of the firms contracted for during that period.
Liability for Cheques, etc.,
By application of Companies Act, any member who signs or authorizes the signature of a cheque, order, etc. on which the LLP's name is incorrectly presented is liable to the holder of the instrument (unless the amount is paid by the LLP).
Insolvency: Wrongful Trading
Where an LLP goes into creditors' (i.e. insolvent) voluntary liquidation, the liquidator will be able to investigate the circumstances prior to the firm's winding up in order to assess whether any of the firm's members should be ordered personally to pay some contribution (to be decided by the courts in light of the circumstances of the case) towards paying off the company's debts to its creditors. If the liquidator can identify a point at which, in his or her opinion, a member knew or ought to have known that the LLP would not be able to avoid insolvent liquidation.
It will be a defence for any members, in court, to be able to demonstrate that they took "every step" to minimise potential losses to creditors. In other words, in a situation where the members of an LLP conclude (or, in retrospect should, in the circumstances, have concluded) that their firm cannot avoid insolvent liquidation, they should take some form of remedial action forthwith. As is the case with respect to the application of s. 214 to companies, the courts, when assessing whether an individual member knew or ought to have known the likely fate of the firm, will be able to apply both a subjective test and an objective test.
In the former case, the courts will consider whether the member concerned, given their particular expertise and experience, could have been expected to understand the firm's situation and take appropriate action on the strength of it. In the latter case, the member's conduct will be assessed against an objective test of what a reasonable person could have been expected to know and do as a member of an LLP.
UK Limited Liability Partnership' Insolvency: Adjustment of Withdrawals
Popularly referred to as the "clawback" rule, this new provision, which is inserted into the Insolvency Act 1986, has been drafted exclusively for application to the special position of LLPs. The liquidator of an LLP may investigate all withdrawals of property made from the firm by any member in the two-year period leading up to the commencement of the LLP's winding up. Withdrawals for this purpose include profit share, salary, repayment, or payment of interest on a loan to the firm.
The liquidator may make an application to the court where he or she considers that at the time of making any withdrawal, the member concerned knew or had reasonable grounds for believing that the LLP was unable to pay its debts (as defined by s. 123 of the Insolvency Act) or would become unable to pay its debts following the withdrawal (either on its own or in conjunction with other withdrawals being made by other members at the same time). The court, if it upholds the application, may order a member to make a financial contribution to the liquidator of up to the value of all the property withdrawn by him or her during the two-year period.
In considering an application, the court will assess whether each member referred to knew or ought to have concluded that, after each withdrawal, there was no reasonable prospect of the LLP avoiding insolvent liquidation. In making its assessment of the facts that a member should know and the conclusions that they ought to have reached, the court will make reference to a benchmark of a reasonably diligent person, having (i) the general knowledge, skill and experience that may reasonably be expected of a member of an LLP; and (ii) the knowledge, skill and experience that the member in question actually has.
How the courts will to a great extent define the level of skill and care that the law will expect of members. The introduction of the "objective" test in connection with liability for wrongful trading has had a significant impact on the level of skill and care which the law expects of company directors. If, as many believe, the LLP structure is adopted overwhelmingly by professional firms, the courts might well take the view that the standard of conduct to be expected from LLP members should be higher than that which is expected of company directors.
Liability in Tort or Contract
As discussed in the Introduction, the LLP legislation was developed largely in response to concerns expressed by professional firms about the exposure of themselves and their partners to liability. The protection which the corporate structure of the LLP offers to individual members should not, however, be taken entirely for granted.
In a House of Lords debate, during the course of the progression of the LLP Bill, Lord Goldsmith, a former chairman of the Bar Council, suggested that, where members of an LLP acted in a substantive way as if they were (still) partners in a partnership, the courts might decide to "pierce the veil" and treat the LLP's members as if they were in fact partners and outside the protection of the LLP structure. It will be noted that whereas an LLP or a company must be incorporated by a formal procedure, a partnership can be created informally.
The courts have also considered whether, in certain circumstances, a director of a limited company may assume a personal duty of care and therefore personal liability. Ordinarily, of course, a director acts on behalf of their company but the distinction between a company and its directors may become blurred, especially since limited companies have been able to function with just one director/member. In the case of Williams v Natural Life Health Foods Ltd (1998 BCC 428), the House of Lords considered an appeal against a ruling that a company director owed a personal duty of care to a customer of his company.
The Lords overturned the earlier ruling but gave guidance on the circumstances in which a personal duty might arise. In order to establish a personal duty of care, there must be not only a special relationship between a director and a client or customer, but a clear assumption of responsibility. Further, for the courts to impute a personal duty of care to a director, it is necessary for there to be objective evidence that, in the circumstances, it is reasonable for a customer to rely on the director's assumption of personal responsibility. Such evidence would include oral or written statements and the actual conduct of the director.
In light of the above, members of LLPs should ensure that, in all their dealings with clients or customers and the public, they do not give cause to believe that the activity being undertaken is undertaken other than by its agents on behalf of the LLP. In the case of a professional firm, the engagement letter should be precise as to the contracting parties.
Criminal and Civil Liability under the LLP Act and Regulations
The LLP Act and Regulations set out a large number of offences for failure to comply with the statutory responsibilities placed on them by or under the Act. In the case of members generally, their responsibilities are invariably collective. For example, they are collectively responsible for appointing auditors and preparing accounts. Designated members are additionally responsible for filing information and providing information to third parties. For example, they are required by law to file the LLP's annual accounts and to make a statutory declaration in the case of the LLP's members voluntary winding up. Financial penalties are provided for any breach of any of these requirements.
UK Limited Liability Partnership' Disqualification
The Company Directors Disqualification Act 1986 (CDDA) is applied to members of LLPs. Accordingly, the courts can make a disqualification order against any member (or shadow member) of an LLP if it feels that their conduct in that capacity warrants such action. A disqualification order made against a member of an LLP will preclude the person concerned from acting as a director of a company as well as a member of another LLP (and vice versa).
Disqualification orders can be made under the CDDA in respect of breaches of on-going obligations, for example, following prosecutions for failing to deliver statutory documents to the Registrar, and also on the specific ground of "unfitness", as initiated by the liquidator following the winding up of the LLP. One additional paragraph is added to the list in Schedule 1 of the CDDA of matters which the court is required to take into account when considering whether any individual member of an LLP is "unfit".
This new provision requires the court to consider the extent to which the member has been responsible for the finding by a court that any member of the LLP concerned is required to make a contribution under s. 214A of the Insolvency Act (this is the "Clawback" rule referred to previously).
Establish British Limited Liability Partnership
In order to form a limited liability partnership in the United Kingdom, there must at the outset be at least two people who are associated for the carrying on of a lawful business with a view to profit and who subscribe their names to an "incorporation document". A written statement must also be given that there has been compliance with the requirement that at least two persons, associated for the purpose of carrying on a lawful business with a view to profit, have subscribed their names to the incorporation document.
The statement must be made by a subscriber to the incorporation document or a solicitor engaged in the formation of the LLP. The incorporation document and the statement have been combined into one prescribed form. This form, duly completed and signed, must be delivered to the Registrar together with the prescribed fee.
The incorporation document is required to contain specified items of information: the name of the limited liability partnership, whether the registered office is to be situated in England and Wales, in Wales or in Scotland, the address of the registered office, the name and address of the persons who are to be members on incorporation and whether some or all of the members are to be designated members. The "statement" contained in the form does not take the form of a statutory declaration but an offence is committed if a person makes such a statement which that person knows to be false or does not believe to be true.
A person who commits this offence is liable on summary conviction to imprisonment for up to six months or a fine that does not exceed the statutory maximum (currently £5,000.00) or both. If the conviction is on indictment, the person will be liable to imprisonment for a period of not more than two years or a fine or both.
The name under which a limited liability partnership is to be registered is subject to various restrictions and requirements. The name of an LLP must end with the expression "Limited Liability Partnership" or the abbreviation "L.L.P." or "LLP" (or, where the registered office of the LLP is to be in Wales, a specified Welsh equivalent). The name may not include, without the required permission, any of the various prescribed controlled words.
In other words, the usual rules for company names apply with the necessary adaptations for limited liability partnerships. The Secretary of State also has power to direct a change of an LLP's name within 12 months of its adoption if, in the DTI's opinion, it is too like the name of another entity on the index of names.
When the Registrar's office receives the incorporation form, it retains and registers it. The "statement" contained in incorporation form may be accepted by the Registrar as sufficient evidence have been complied with. When the documents have been registered, the Registrar issues a certificate of registration which is conclusive evidence have been complied with and that the LLP is incorporated by the name specified in the incorporation document.
Which of the members are to be designated members or that all are designated members who are responsible for compliance with the requirements of the LLP Act. Unlike limited companies, limited liability partnerships do not have a memorandum or articles of Association. However, it is important for members to have a valid partnership agreement - this does not need to be provided to Companies House.
Limited Liability Partnership Stationery
As with limited companies, there is certain information that must be displayed on the LLP's stationery. All business letters, notices and publications, cheques, bills, invoices etc must bear the full name of the limited liability partnership including the words limited liability partnership or the abbreviation LLP. In addition, all business letters and order forms must show the following: the place of registration - e.g.; "Registered in England & Wales" or "Registered in Scotland", the registered number, the fact that it is a limited liability partnership, and the address of its registered office.
UK Limited Liability Partnership' Responsibility to Prepare Accounts
The members of the LLP are responsible for preparing the firm's annual accounts and, if applicable, consolidated accounts for it and its subsidiaries. The accounts must be approved by the members and signed by a designated member. The accounts, together with the auditor's report where appropriate, must be sent to every member of the LLP and to all the firm's debenture holders (if any) within one month of their being signed, and in any event no later than ten months of the end of the relevant reference period.
The accounts, which must be properly prepared and give a true and fair view, comprise the balance sheet, profit and loss account and notes to the accounts. There is no requirement to prepare a directors' report.
Delivery of the Accounts
Every LLP has an accounting reference date which is its financial year-end. It is also the date that determines when accounts are due for delivery to Companies House. You must tell Companies House when you have changed the date. It can be costly if you forget to tell us and prepare accounts to the wrong date. If you do, we will refuse registration of the accounts and you will have to prepare fresh accounts to the accounting reference date held on record at Companies House.
Every LLP must prepare a set of accounts for their members and a set for filing at Companies House. Small and medium-sized LLPs may choose to comply with separate requirements for the accounts that they must prepare for its members and those that they file at Companies House. For large LLPs, both sets of accounts are identical. There is a deadline for delivering acceptable accounts which comply with all relevant legal requirements to Companies House. If you miss the deadline and file your accounts late, we will issue an automatic penalty, without exception. So it is important that you, your accountants and your auditors, where appointed, are aware of the filing deadline.
The requirements and filing deadlines of the Companies Act 2006 are not the same as those of Her Majesty's Revenue and Customs or other regulatory bodies such as the Financial Services Authority. It is the members' responsibility to be aware of the different requirements. Accounting records are records which are sufficient to show and explain the LLP's transactions and to disclose (with reasonable accuracy) its financial position at any time. The accounting records must enable the members to prepare accounts that comply with the requirements of the Companies Act,
Can You File Abbreviated Accounts?
In most cases, small and medium-sized companies and limited liability partnerships (LLPs) are entitled to submit abbreviated accounts to Companies House - which means they have to provide less information. For financial years starting on or after 6 April 2008, a small company (1 October 2008 for a small LLP) must meet at least two of the following conditions: -
Annual turnover must be no more than £6.5 million;
Balance sheet total must be no more than £3.26 million;
Average number of employees must be no more than 50.
For financial years starting on or after 6 April 2008, a medium-sized company (1 October 2008 for a medium-sized LLP), must meet at least two of the following conditions: -
Annual turnover must be no more than £25.9 million;
Balance sheet total must be no more than £12.9 million ;
Average number of employees must be no more than 50.
Even if an LLP stops being small or medium-sized through expansion, it will still be regarded as such for one financial year afterwards. If it then reverts to being a small or medium-sized LLP the following year, the exemption will continue uninterrupted. If you think your LLP might qualify, you may consider consulting a professional accountant before preparing abbreviated accounts. There are special rules for groups of small and medium-sized LLPs whose total overall size falls within the small and medium categories. Recent expansions to the scheme now also allow some small financial services providers and some small businesses - such as home-finance providers - that comply with Sharia Law to take part in the scheme.
Some small and medium-sized businesses, limited liability partnerships (LLP) and groups cannot submit abbreviated accounts. An LLP cannot submit small abbreviated accounts if it is, or was at any time during the financial year: -
An LLP whose securities are admitted to trading on a regulated market in an European Economic Area (EEA) State;
An LLP that is, or was, an authorised insurance company, a banking LLP, an e-money issuer, a MiFID investment firm or a UCITS management company carried on insurance market activity;
A member of an ineligible group.
A group is ineligible if any of its members is: -
A public company;
A body corporate (other than a company) whose shares are admitted to trading on a regulated market in an EEA State;
A person (other than a small company or small LLP) who has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a regulated activity;
A small company or small LLP that is an authorised insurance company, a banking company or banking LLP, an e-money issuer, a MiFID investment firm or a UCITS management company;
A person who carries on insurance market activity.
An LLP cannot submit medium abbreviated accounts if it is, or was at any time during the financial year: -
An LLP whose securities are admitted to trading on a regulated market in an EEA State
An LLP that has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a regulated activity, or carries on insurance market activity a member of an ineligible group.
A group is ineligible if any member is: -
A public company;
A body corporate (other than a company) whose shares are admitted to trading on a regulated market;
A person (other than a small company or small LLP) who has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a regulated activity;
A small company or small LLP that is an authorised insurance company, a banking company or banking LLP, an e-money issuer, a MiFID investment firm or a UCITS management company;
A person who carries on insurance market activity.
Do All LLPs Have to Keep Accounting Records?
Yes, every LLP, whether or not they are trading, must keep accounting records.
Audit Exemption
Although all limited liability partnerships (LLPs) have to submit some form of accounts to Companies House, these accounts don't have to be audited for financial years starting before 6 April 2008 or prior to 1 October 2008 for LLPs if you: -
Qualify as a small LLP for the purposes of filing abbreviated accounts;
Have a turnover of no more than £5.6 million;
Have a balance sheet total of no more than £2.8 million.
For financial years starting on or after 6 April 2008, to qualify for total audit exemption, a company must: -
Qualify as a small LLP;
Have a turnover of no more than £6.5 million;
Have a balance sheet total of no more than £3.26 million.
Small and medium-sized LLPs can take advantage of the higher thresholds for accounting periods starting on or after 1 October 2008. In these cases you can submit audited accounts if you wish, but it's not compulsory. Bear in mind there can be drawbacks. Banks, credit managers and your customers and suppliers rely on information from Companies House to assess creditworthiness and will be reassured by an independent audit. If you decide to submit audited accounts, you must appoint an auditor.
Even if a small LLP meets the criteria, it must still have its accounts audited if any of the following ask for an audit: -
A member or members holding at least 10 per cent of the value of issued share capital or 10 per cent of any class of shares;
In the case of a company limited by guarantee - 10 per cent of its members in number.
Recent changes to the rules have allowed some small financial services businesses and some small businesses, such as home-finance providers, that comply with Sharia law to qualify for an audit exemption. However, businesses taking advantage of the audit exemption should be aware that shareholders who own 10 per cent or more of the company still have the right to ask for an audit.
What Must Accounting Records Include
Accounting records must in particular contain: -
Entries showing all money received and expended by the LLP; and
A record of the assets and liabilities.
Also, where the LLP's business involves dealing in goods the records must contain: -
Statements of stock held by the LLP at the end of each financial year;
All statements of stock takings from which you have taken or prepared any statements of stock; and
A statement of all goods sold and purchased, other than by ordinary retail trade. This should list the goods, the buyers and sellers.
A parent LLP must take reasonable steps to ensure that any subsidiary undertaking keeps sufficient accounting records so that the members of the parent are able to prepare accounts that comply with the requirements of the Companies Act, including where the accounts are prepared using International Accounting Standards.
UK Limited Liability Partnership': Where Must an LLP Keep its Accounting Records?
An LLP must keep its accounting records at its registered office address or a place that the members think suitable. The records must be open to inspection by the LLP members at all times.
If the LLP holds the records at a place outside of the UK, it must send accounts and returns with details of the business dealt with in the accounting records at least every six months and keep them in the UK. Those accounts and returns must disclose the financial position and enable the members to prepare accounts that comply with the requirements of the Companies Act, including where the accounts are prepared using International Accounting Standards.
Remuneration of Members
A new paragraph 56A is applied to LLPs. This requires LLPs to give two items of information. First, a figure for the average number of members in the firm during the year must be given. Second, if the amount of the LLP's profit before members' remuneration and profit share exceeds the £102,000, the amount of profit (including remuneration) which is attributable to the member with the largest entitlement to profit (including remuneration) must be disclosed.
For the purposes of deciding the amount to be disclosed in relation to the highest earning member, remuneration is to include emoluments specified in Companies Act and which are paid by or receivable from the LLP, its subsidiary undertakings and any other person.
Merger accounting. It is specifically provided that where a "parent" LLP adopts the merger method of accounting in preparing its group accounts, it must comply not only with the remainder of the revised paragraph 11 of Schedule 4A but with generally accepted accounting principles or practice. This latter requirement effectively requires LLPs to comply with the guidance contained in the Statement of Recommended Practice (SORP) on LLPs, expected to be issued towards the end of 2001.
LLP Taxation
While the LLP is a corporate body with separate legal personality, for tax purposes the LLP is to be treated essentially as a traditional partnership. The key features of the statutory provisions on tax are as follows.
LLP Income Tax
Thus, s. 10 of the LLP Act adds a new section 118Z to the Income and Corporation Taxes Act 1988, providing that a trade, profession or business carried on by an LLP with a view to profit is to be treated for tax purposes as being carried on in partnership by its members and not by the LLP as such. The property of the LLP is to be treated for tax purposes as partnership property. An LLP which meets the test of operating as a trade, profession or business with a view to profit will, therefore, be transparent for tax purposes: like partners, the members of an LLP will be individually liable to tax on their shares of the profits earned by the LLP.
Capital Gains
A new clause (s. 59A) is added to s. 59 of the Taxation of Chargeable Gains Act 1992. This provides that, where an LLP carries on a trade or business with a view to profit, assets held by the LLP are to be treated for the purposes of chargeable gains tax as being held by its members as partners, and any dealings by the LLP are to be treated likewise as dealings by the members in practice. Tax in respect of chargeable gains accruing to the members of the LLP on the disposal of any of its assets is to be assessed and charged on each of them separately. Any acquisition or disposal of assets will not be treated as being made by the LLP itself.
Inheritance Tax
A new s. 267A is inserted into the Inheritance Tax Act 1984. This makes clear that, for inheritance tax purposes, the property of the LLP is to be treated as the property of the partners and that the formation, change in membership and dissolution of an LLP are to be treated as the formation, change in membership or dissolution of a partnership. Business relief will be available on that basis. Any transfer of value made by or to an LLP is to be treated as made by or to its members in partnership.
Stamp Duty
Stamp duty is not chargeable on a transfer of property by a person to an LLP within one year of its incorporation provided that, immediately before incorporation, two conditions are satisfied. The first condition is that the person making the transfer is either a partner in a partnership which comprises all the persons who are to become members of the LLP (and no one else); or a person who holds the property transferred as nominee or bare trustee for one or more of the partners in that partnership.
The second condition is that: the members' entitlements to the property is to be the same as their entitlements to it in the partnership; or no difference in the entitlements arises as part of a scheme of which the main or one of the main purposes is to avoid tax.
National Insurance
Where income tax is chargeable on a member of an LLP in respect of profits or gains arising from the carrying on of a trade or profession by the LLP, Class 4 contributions are payable by that member.
Summary
The above paragraphs outline the main statutory provisions on tax in the LLP Act. Further legislation was planned in the Finance Bill 2001 to address the approach to be taken with respect to the taxation of types of businesses, including investment businesses, which might be motivated to adopt the LLP structure for purely tax reasons rather than to obtain limited liability.
Capital allowances - where an LLP succeeds to a business previously carried on by a partnership, this will not in itself give rise to a balancing event for the purposes of the Capital Allowance rules.
Cessation - where an LLP succeeds to a business previously carried on by an old partnership, this will not in itself involve the cessation of the old partnership's trade or profession.
Partnership annuities - where an obligation to pay an annuity's transferred from a partnership to an LLP, the members of the LLP will be entitled to higher rate income tax relief for their share of ongoing payments. Incoming members who assume part of this obligation will also be entitled to such relief.
Capital gains: partners' interests - so long as the LLP carries on a trade or profession with a view to profit, a Partner's capital interest as a member of the LLP will not be regarded as a chargeable asset in its own right. Members of the LLP will be directly taxable on their share of the LLP's assets.
Ceasing to trade - where an LLP ceases to carry on a trade or profession it will no longer be regarded as a "partnership" for tax purposes and will instead be regarded as a "body corporate". The LLP will then cease to be "transparent". Where an LLP goes into liquidation, chargeable gains on the disposal of the LLP's assets by the liquidator will be computed by reference to the date on which they were first acquired by the LLP and their cost at that date. During the winding up itself, the LLP's capital gains will be treated in the same way as any other body corporate.
UK LLP Registration and Incorporation: Live Help
You can chat with one of our advisors right now. Just click on the image to the left to start chatting. Live Help is a real time chat feature which enables you to interact with our customer service representative or our business consultants without a phone call. Get answers to your questions while using our web-site. Clicking the "Live Help" button will start an online session with one of our representatives. Live Help is currently available during normal business hours. Outside of the indicated below opening hours, our Live Help centre will be closed, when you click on the chat button, you will see an e-mail form that allows you to send us an e-mail request with your questions. Our Live Help is free, there are no hidden fees.
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Establish an LLP with Coddan Online: Money and Payment Policy
Coddan accepts all major currencies; we accept Visa, Visa Electron, Visa Purchasing, JCB, MasterCard, Maestro, Solo, and Delta, we also accept cheques (may be held 10 days to clear) or cash deposit, and bank transfers from anywhere to our bank accounts. After you place an order, details about the banking transfer will be e-mailed to you on the second e-mail notification. If you missed that e-mail, please call our phone number that is given on the order confirmation. The customer is responsible for the reimbursement of any bank wire transfer payments.
Our credit card payment processing is by WorldPay - an important part of The Royal Bank of Scotland Group, the 5th biggest banking group in the world. We do not charge surcharges for the debit and credit card transactions. Credit or debit card payment is now authorised online in real time. You will be informed immediately if your credit or debit card is declined. If declined, you may check the accuracy of the card number and expiration date, or choose a different card to try.
We need to receive a payment before we can proceed with a new company formation. For regular or corporate clients, we can open a professional credit account. However, this benefit cannot be provided to a new customer, who never placed orders with us.
If you do not feel comfortable transmitting your credit card details on the Internet, we suggest you place an order online, choose the option "Credit Card via the Phone" as the payment method, and then phone in to give us your credit card number over the phone. We will charge your credit card manually. We can also accept credit or debit card payments by fax, to do so, we will e-mail you a credit or debit card authorisation form, and you will need to print out the form, complete the details by hand and send it to us by fax to: + 44 (0) 207.504.3531.
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£ 125.00
This is our most popular package with UK residents, and includes: -
The registration of your LLP from scratch using your own registered office address, and appoint your own candidates to the roles of members and designated members;
The provision of a registered office address in London for 12 months is also included in the price of this package (our registered office address service is charged annually);
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