Governed by the Limited Liability Partnerships Act of 2000, a Limited Liability Partnership (LLP) in the UK is essentially the same as Limited Liability Company, only with two or more founding partners. As with any Limited Liability Company, the biggest advantage of a Limited Liability Partnership is for the individual partners to lower their risk of liabilities in case the business fails. Whereas each member in an regular partnership company are personally responsible for any business debts, the assets of LLP partners are protected since it is the company itself that is responsible for any business related debts and not the individual partners.
The biggest downside to running your business as a Limited Liability Partnership, as in all Limited Liability companies, is the increased administrative duties. Here is where Midford Accountants can help. Our agents are on hand to help ease you through all administrative tasks that must be done to maintain your LLP in good legal standing with current UK regulations, leaving you free to focus on your core business. We have the experience and expertise needed to make quick work of annual accounts and tax return filings.
Any individuals or existing businesses can be founding members of a Limited Liability Partnership. Any LLP must have at least two members at the time of company registration, and the rights and responsibilities of all members must be clearly laid out in the Deed of Partnership. This deed is a legally binding document and contains details like: the names and addresses of all the founding members; how much capital each will invest; their respective roles and responsibilities; and finally, contingency plans in case a member leaves the LLP at some point in the future.
Additionally, an LLP must have a designated member who will be responsible for maintaining communications between the company and Companies House, the UK's official registrar. This designated member is responsible for preparing accounts and representing the interests of the LLP in case the company is wound down. The agents at Midford Accountants have dealt with the creation of many Limited Liability Partnerships and can quickly draft together a standard Deed of Partnership as well as set up a designated member.
Since all the profits in a LLP are distributed between its member partners, the individual partners of the company are responsible for all tax liabilities. Most individual partners should declare all income from the LLP via self-assessment since he or she most likely is self-employed. If an LLP member is another business, its income from the LLP will be assessed under corporation tax rules. LLP's share the same VAT structure as other UK limited liability companies. Midford Accountants' London based accountants are always on hand to help you deal with the tax obligations as well as any VAT responsibilities of your Limited Liability Partnership.