A limited liability partnership is a unique kind of corporate form that’s common with individuals who often work in partnership organizations, but whose members need to have liability protection. It lacks executives, investors, or underwriters, which is one of the main distinctions between it and a limited corporation. Rather, it has what is more frequently described as “partners,” or associates. These are regulated as partnerships and are controlled by the Limited Liability Partnership Code of 2000.
Registering LLP
Much like a limited corporation, an LLP is incorporated at the Companies Registry. These firm types are now almost always established electronically. Employing a professional company incorporation representative typically costs between £50 and £150, based on the level of assistance, around the same as forming a private company with shares.
The registration requires the following procedures:
- Company’s name;
- Location; and
- Details of members.
These conditions are covered below:
Company’s name
Your enterprise name cannot be too identical to or the same as the title of another established firm. The last letter of the name must be “Limited Liability Partnership”. Additionally, if a name is too close to another one already in use, it may be construed as being the “same as” or “too like.”
You must abide by specific guidelines while presenting your brand name. You have the option of using your name or picking a different name for your company. On formal documents, such as letters and bills, you must include the initials of all participants as well as the company’s name.
Location
The official headquarters is established at your authorized office location. All written correspondence must be forwarded to this address. Using a third-party operator to manage your post is also an option. Your legal location must be a physical place in the same nation where your limited liability partnership is incorporated.
Members responsibilities
You must always have two “chosen members” as they will be in charge of various tasks. The number of regular members is unlimited. As part of establishing an LLP, you should draught a contract with any new members. It lays out the guidelines for business operations, earnings, obligations, and choices.
Members must fulfill their obligations and uphold their legal obligations as outlined in the agreement. If designated parties fail to uphold their legal commitments, they risk prosecution.
Documents required for registration
The following documents are required to register the LLP in the UK:
- Registered name;
- Registered address;
- Directors’ personal information;
- Shareholder’s personal information;
- Firm’s constitution;
- Details about the firm’s management; and
- Share capital deposit proof.
An LLP is practical if you already have a regular association but wish to grow it or if you work in a profession that necessitates liability coverage, such as medicine, law, auditing, etc. After providing all essential papers and getting registered, make sure to file for all corporate taxes.
LLP transition from a partnership
The method for converting an existing partnership to a limited one is the same as for converting a sole proprietorship or partnership enterprise to a limited firm. For the LLP to take over the current firm, a date will need to be set aside for registration. Assets must be transferred from the founders to the company. According to LLPA 2000, s.12, there is no taxes levied on the transference if the participants are the same as the founding owners and hold the properties in the same ratios.
Ending note
It is not hard to incorporate an LLP, but it is strongly advised to put the obligations and responsibilities of each participant in writing in an alliance compact or charter. This is a confidential and optional file. Although it is not required by law to have such an accord or make its contents public, it is often the case in reality. An agreement is the best approach to setting down the rules and limitations of a limited liability partnership because it lacks employment contracts.
