All About UK Limited Liability Partnerships

by Ahmad Kamil Offshore Company

A partnership is one of the type of business which is owned by more than one individual. The profit and liability of the business are equally sheared as per the capital invested. But limited liability partnership is a special sort of partnership that can be formed by two or more people with the combination of fashioned partnerships and limited liability companies.

In UK it is incorporated under the Limited Liability Partnerships Act 2000 (the "LLPA 2000"). UK LLP the partners have limited liability for the debts which can’t pay back the business. They are liable to the limited liability according to the amount they invested in the business. Foreigners who like to invest in the strong country like UK that give multiple tax benefits fit this type of partnership very well to start their business by investing limited amount and taking limited reasonability.

UK Limited Liability Partnerships are quite suitable for foreign partners who wish to take active part in role of management without taking full liability as offered in other types of partnerships. In this investors take the passive role with at least one partner holding the unlimited liability. As per LLPS 2000 all the associated members are considered as the partners with the limited liability according to their investment.

Features Of UK LLP

LLP is a body which is formed by number of people of the country and outside the country. It gives an unlimited capacity to its partners to start any legal business according to their desire. The liability on the members are limited which is decided according to their investment. They are not at all liable to pay debts except few situations such as misfeasance, as per agreement and so on.
The members of the partnership are free to decide the way they want to share their profit. They are also free to take decision regarding the responsibilities of the management, decision making authorities, and the criteria of new members as well as the way and on age they retire. There is no obligation to contribute any limited amount as capital among the members, unless agreed.
UK Limited Liability Partnerships is a secured and confidential agreement with no need to disclose among the public anywhere in the country. In case, there is no agreement among the members that default provision of Limited Liability Partnership Regulations 2001 will be regulated among the partners. This provision is considered as appropriate because it shows the rights and duties of the partners and members involved in LLP.

Members In LLP

There is not a defined number of maximum members but the minimum of two members are required all the time to start and continue the partnership. To become the member of any LLP one needs to meet the membership criteria and sign the agreement with other members. It is noteworthy that member of LLP can be an individual or a corporate body. Members have full right to make changes in exiting partnership anytime.

Taxation

The actives and property involved in LLP belongs to its members according to their agreement and on that basis the tax is assessed as their share in gains and income. It means company has to pay the tax in the same way in general partnership and its members have to pay income tax according to their share of profit.

The details provided above are for information purpose only and should not be considered as advice. Requirements of everyone are different so one must take professional advice to ensure he/she is taking the right decision according to their case.