Please enable JavaScript.
Coggle requires JavaScript to display documents.
Limited Liability Partnerships - Coggle Diagram
Limited Liability Partnerships
Formation
S2(1)(a) - two or more persons associated for carrying on a
lawful business with a view to profit can incorporate
Registration at CH - members fill out a form LL 1N01 which is sent with the relevant fee
S2(2) - LL 1N01 must state the name, registered office address and designated members
Certificate of incorporation then issued
Must continue to file info with CH: any change of name, address, in membership, creation of a charge, annual confirmation statement and accounts
Must also maintain in-house records: register of its members and people with significant control
Members
Those who subscribed into the incorporation document and those who became members at a later date by agreement with existing members
S4(2) - persons, not just individuals, can be members (therefore corporate bodies)
Must have at least 2 formally appointed members at all times but there is no max limit
At least 2 members must be ‘designated members’ which obligations including signing the accounts and making filings
4(3) - members will cease to be members upon their death, agreement with the other members, giving notice to other members or dissolution
LLP agreement
Flexible and should be decided between partners in a formal written Members' Agreement (but not obliged) - a private document which sets out formal procedures and arrangements
In the absence of MA, regulations 7/8 of Limited Liability Partnerships Regulations 2001 contain default provisions:
Must share equally in capital and profits, must indemnify members for payments made and personal liabilities incurred by them in the ordinary course of business
Every member must take part in management but not entitled to remuneration for managing
No person can become a member without consent of all existing members
Ordinary decision making may be by the majority of members
Any changes to nature of business requires consent of all members
No implied power of expulsion of a member by the majority unless members have expressly provided for such power in MA
Taxation
Treated as a partnership, it isn't taxed
but the partners individually are
Assets held by LLP treated as being held by members as partners for CGT purposes
Gives relief from stamp duty where partnership is incorporated as an LLP and assets of partnership are transferred to the LLP subject to tax avoidance conditions
LLP may register for VAT, not the members
Limited partnerships
Two different types of partners: (1) limited partners with limited liability and not involved in the management of the business and (2) general partners who run the business and have unlimited liability
Governed by Limited Partnership Act 1907
Often used as investment vehicles
Limited Liability Partnership Act 2000
S1(2) - legally is a body corporate and is treated as a separate legal entity
Registered at CH with
annual filing of accounts
Has flexibility of partnership
but benefit of limited liability
Primarily governed by a
company law framwork