Limited Liability Partnership (LLP)

Summary

An LLP is a partnership that is registered as a company at Companies House and has limited liability.

Accounting regulations

Must prepare accounts in accordance with:

– FRS102 (section 1A if applicable).

– Statement of Recommended Practice: Accounting by Limited Liability Partnerships

Tax implications

Subject to income tax and Class 2 and 4 National Insurance. The regime for deduction of expenses is the same as for corporate bodies. Must complete the SA800, and individual partners complete the SA100.

Advantages

  • Easy and cheap to set up – partnership agreement and register with Companies House
  • Limited Liability
  • A partnership agreement can state social goals, and some worker co-operatives are set up as LLPs
  • Tax regime is easy to negotiate and reasonably benign
  • No audit or any kind of external verification of accounts is ever required

Disadvantages

  • No limited liability
  • No social investment routes available

Services required

  • Accounts preparation
  • Parternship Tax return SA800
  • Payroll (if employing people)
  • VAT advice, if necessary
  • Book-keeping, if required