LLP's

Most important features of Limited liability partnerships

The key advantage of a limited liability partnership when compared with a traditional partnership is that the members of the LLP are able to limit their personal liability. A limited liability partnership is legally a company. It is administered like a company in all aspects except its taxation.

LLP profits are treated as the personal income of the members as if they had run their business as a partnership.

Setting up LLPs

Setting up a LLP involves sending certain documents to the Registrar of Companies. A LLP should have a comprehensive members’ agreement in place.

• You must register with Companies House and file annual accounts
• An annual LL AR01 form must be completed and returned to Companies House
• A Partnership tax return must be filed with HMRC each year detailing the income and expenditure of the business and how the profits have been allocated between the partners
• Each partner must complete a self assessment tax return each year detailing their share of profits and any other sources of income they have

Individual members have historically been deemed to be self-employed but from 6 April 2014 self-employed status is not appropriate in some cases.

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