Limited Liability Partnerships (LLPs)

A limited liability partnership (LLP) is similar to an ordinary partnership - in that a number of individuals or limited companies share in the risks, costs, responsibilities and profits of the business. The difference is that liability is limited to the amount of money they have invested in the business and to any personal guarantees they have given to raise finance. This means that members have some protection if the business runs into trouble. 

1. How Much?

We charge £67.00 inc. VAT to register a new LLP. This includes the £20.00 Companies House fee as well as our fee of £40.00 + VAT of £7.00.

2. How long?

The new Same Day Incorporation service for LLPs is available at just £65.25 (inc VAT) extra. A normal incorporation takes around 5 working days from the date on which the papers are filed..

3. How are they formed?

A form LLP2 needs to be completed and sent to Companies House along with the Companies House duty referred to above. This form must include:-

* Full name of the LLP
* The registered office address
* The full name and address of the Partners (known as Members in LLPs even though it is a form of partnership) along with the dates of birth and, if they’ve been used as Members of a previous LLP, their LLP id number. This is passed to such Members by Companies House upon registration of their first LLP.
* Which of the Members are to be the “Designated Members”.

4. What are Designated Members?

All the members are Members of the LLP, but at least two of them must be noted as Designated Members. Essentially, the Designated Members are the ones who bear the immediate responsibility for meeting the statutory requirements of the LLP such as the preparation and filing of accounts and the Annual Return. The Designated Members can be changed at any time but there must be at least two of them at any one time.

5. Are there any ready mades available?

No! But Companies House are soon to introduce 24 hour, electronic LLP registrations.

6. Can they be formed with A1’s nominees as the first Members?

Yes! BUT, we cannot release the Certificate of Registration until we receive back from the client completed forms LLP288a noting at least two replacement Members.

7. What about Memorandum & Articles of Association?

There are no Memorandum & Articles of Association for LLPs. The only document filed at Companies House for the registration process is the Form LLP2 mentioned above.

However, partnerships of all types are normally regulated by Partnership Agreements and LLPs are no different. Such Agreements are private documents between the Members and are not required to be submitted or published anywhere.


8. Does A1 have such an Agreement?

Yes! We provide the basic document free of charge and by email if you want, but if we are asked to liaise with you and your client to produce an appropriate Agreement, our charges will be around £200.00 + VAT and it will take around two weeks at the quickest to do. A detailed questionnaire will need to be completed by you and the end-user before we can commence drafting work.

9 How do we proceed?

a) We check the name for availability. Exactly the same rules apply for an LLP as for a new Company except that all LLPs must end with that abbreviation or “Limited Liability Partnership” in full in the same way that Companies have to end with “Limited”, or “Ltd”.

b) We take instruction as to whether the new LLP is to be registered with the end-users as the initial members or are to be appointed to replace our nominees.

c) We complete the form LLP2 with all requisite details and either post or email it to you for completion and signing by your client, or file the same at Companies House if we are to use our nominees for registration purposes.

d) If we use our nominees, we send you completed forms LLP288a for signature and return by you and your clients in preparation for the issue of the Certificate of Incorporation.

10. Is an LLP treated differently to a limited liability company by the Inland Revenue?

LLPs are treated in the same way as ordinary partnerships insofar as the members are taxed as individuals on the amounts taken from the LLP’s profits rather than as shareholders becoming liable to Corporation Tax on the dividends paid to them.

Any existing partnership that converts to an LLP is permitted, subject to certain restrictions, to transfer all of its property to a newly registered LLP exempt from stamp duty so long as this is done within the 1st year of incorporation.

* An additional thought on this subject is that non-UK resident Members, if fulfilling all the usual non-resident rules, will not be subject to UK taxation on their income even though the LLP is registered in the United Kingdom. This could be, subject to careful tax planning, the natural successor to the 1988-disbanded UK Non-Resident Company.

A1 are not tax planners or advisors and we must advise that professional tax planning is carried out with an appropriate expert.

11. Is there a limit to liability if the Members are treated as individuals?

LLPs are separate legal entities in the same way that limited liability companies are and so it is the LLP that enters into contracts and agreements and takes on the liabilities attached thereto. Care must be taken by the Members not to act in a negligent or fraudulent manner in the same way that company directors are so regulated and only where this is not done, or where a Member has put himself forward as acting in his own capacity would liability pass to a Member.

12. So who would really want an LLP?

Any professional practice (accountants, lawyers, architects, etc) may incorporate an LLP to take over their business activities and, indeed, many already have. Any commercial enterprise can be run through an LLP and it may be more attractive to the owners to do so if it is deemed more appropriate or beneficial to attract a Schedule D tax status paying Class 2 and Class 4 NICs rather than attracting Schedule E status with employers’ and employees’ NICs. Much care should still always be taken, though, to ensure that IR35 anti avoidance provisions are not contravened.

How to Order

To order a new company with or without a fast track business bank account, simply download, print off and fill in the appropriate order form, contact us via our enquiry form or call us on 020 8458 9637.