UK LLP

Like a company the LLP is a corporate entity, legally separate and distinct from its members. The LLP enters into contracts in its own name and critically, liability rests with the LLP not with the members. Interestingly, all the partners benefit from limited liability; there is no 'general partner'. Instead there are two 'designated members' who have additional responsibilities in terms of the LLP's filing requirements.

The LLP is required to place documents (excluding the partnership agreement) on public file with the Registrar of Companies. The Registrar of Companies issues an incorporation document stating the LLP's name and registration number. Its address (registered office), 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 company.

Like a partnership there are no shares. However, the proportion of the profits payable to each partner may vary according to terms laid out in the partnership agreement. And, indeed it is possible to have members with no entitlement to a share in the profits. It is also possible to have 'salaried members', who are remunerated by salary only.

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.

They are governed by the following Acts:

•  Limited Liability Partnership Act 2000.

•  The Income and Corporation Taxes Act 1988 (as amended).

PROCEDURE TO INCORPORATE

A form LLP2 is submitted to Companies House with an incorporation fee.

RESTRICTIONS ON TRADING

LLP's cannot carry on banking, insurance, financial services, consumer credit related services and employment agencies.

POWERS OF COMPANY

A LLP has the same powers as a natural person.

LANGUAGE OF CORPORATE DOCUMENTATION

A LLP is incorporated using the English language and with an English name.

NAME RESTRICTIONS

A LLP cannot register with any name that has already been incorporated in the UK or is so similar to an existing name that it may cause confusion. Any name which in the opinion of the Registrar is considered undesirable, obscene or offensive will also be rejected. Similarly any name that suggests the patronage of the Royal Family or the Government of the United Kingdom is not permitted.

There are many other restricted names and a list of sensitive names can be found on this website under UK Companies - Sensitive names (can we have a link here???)

COMPANY NAMES

A LLP can only have the suffix Limited Liability Partnership or LLP.

LANGUAGE

English is the language used.

REGISTERED OFFICE REQUIRED

A LLP must have a registered office in the United Kingdom.

AUTHORISED and ISSUED SHARE CAPITAL

A LLP does not have an authorised or issued share capital.  

CLASSES OF SHARES

As a LLP does not have shares this is not applicable.

DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES

There is no disclosure of the beneficial owner(s).

TAXATION

The members exemption from UK tax is only applicable provided that no business or trade is carried out with or within the United Kingdom. The Inland Revenue have confirmed that taxation of a limited liability partnership will be the same as that operated in the past for partnerships. The limited liability partnership itself will not be liable for taxation on profits or gains arising within the partnership, but the profits or gains will be assessed to tax separately on the individual partners/members. In order to retain this status a limited liability partnership must be trading with a view to making a profit and is not in liquidation.

DOUBLE TAXATION AGREEMENTS

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 Seychelles then no double tax treaties exist.

GOVERNMENT LICENCE FEES

There are no Licence Fees

FINANCIAL STATEMENT REQUIREMENTS

All UK LLPs are required to file accounts with the Registrar of Companies. Small sized LLP's can file abbreviated accounts and do not require an audit.  

DESIGNATED MEMBERS

The minimum number of designated members is two. They may be natural persons or a body corporate. They can be of any nationality and need not be a UK resident.

COMPANY SECRETARY

There is no requirement for a Company Secretary.