LLP?  WHAT IS IT?

An LLP is an abbreviation for Limited Liability Partnership.  It is known in legislation as a ‘body corporate’.

It is a cross between a conventional partnership and a limited company.

Each partner in the partnership is taxed under income tax legislation, on their share of the profits.  The LLP will need to file at the Revenue a Partnership self assessment return each tax year, as well as each partner filing their own self assessment.

Accounts are due to be filed at Companies House according to the statutory deadline, i.e 9 months from date of incorporation in first accounting period, or 9 months from year end date.

An LLP must also deliver to Companies House an annual return each year detailing any changes to its statutory records during the year.  There is a filing fee for this.

The purpose of an LLP is to give protection to the partners in the LLP from creditors and easier taxation wise for succession purposes for exiting or incoming partners.

All LLP’s conform under the Limited Liability Partnerships Act 2000 and this gives detailed guidance to partners within an LLP.

Some LLP’s will need to have audited accounts prepared and submit full accounts to Companies House for filing, this will depend on the size of the LLP in question.

Loss relief for members of LLPs are the same as for normal partnerships, however there is a restriction, and partners entering into new LLPs or converting from a sole-trader to an LLP must be aware of the restrictions in place at the appropriate time.

It is possible to have a Limited company as a partner within an LLP, but it must have commercial justification.

A Limited Liability Partnership is another trading option for partners to consider, when establishing or converting another business.

There is much to HMRC’s legislation and it is advisable you seek the advice of a qualified appropriate accountant. 

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