This is our most popular package with UK residents, and includes: The filing and registration of your LLP The submission of forms detailing the LLP's executive members (partners) Incorporation forms (Form LLP2) do not require the signature of a Notary Public The formation of your LLP within 4-6 working days PPayment of legal and initiation fees The appointment of your own candidates as members for the LLP (a minimum of two people are required) The following documents will be posted to you (these documents will be sent via Royal Mail): The original laminated Certificate of Registration A hard bound copy of the Combined LLP Register A hard bound copy of the Partnership Agreement The Minutes of the First Members' Meeting Membership Certificates and completed Members' Register
Premier Package
£ 175.00
Renewal fees from £50.00
This is our most popular package with EU residents, and includes: The filing and registration of your LLP The submission of forms detailing the LLP's executive members (partners) Incorporation forms (Form LLP2) do not require the signature of a Notary Public The formation of your LLP within 4-6 working days Payment of legal and initiation fees The appointment of your own candidates as members for the LLP (a minimum of two people are required) A A registered office address for 12 months, provided by Coddan An application form for the following year's renewal of the Registered Office Address service (£50.00) Annual Return and Annual Account reminder The following documents will be posted to you (these documents will be sent via Royal Mail): The original laminated Certificate of Registration A hard bound copy of the Combined LLP Register A hard bound copy of the Partnership Agreement The Minutes of the First Members' Meeting Membership Certificates and completed Members' Register
Deluxe Package
£ 425.00
Renewal fees from £300.00
This is our most popular package with overseas residents, and includes: The formation of your LLP within 4-6 working days Payment of legal and initiation fees A A registered office address for 12 months, provided by Coddan An application form for the following year's renewal of the Registered Office Address service (£50.00) A LLP nominee designated members service for 1 year The names of the nominee designated LLP members will appear on the public record Annual Return and Annual Account reminder The following documents will be posted to you (these documents will be sent via Royal Mail): The original laminated Certificate of Registration A hard bound copy of the Combined LLP Register A hard bound copy of the Partnership Agreement The Minutes of the First Members' Meeting Membership Certificates and completed Members' Register A General Power of Attorney signed by the Nominees A pre-signed, undated letter of resignation from the Nominee Members An indemnity Letter for the General Power of Attorney A nominee service agreement which provides for the indemnification of the nominees
LLP Creation Checklist: Legal Requirements
Setting-Up LLP: You have to register with Companies House, the method is similar to registering a company. LLP subscribers may be residents outside the UK. A LLP must exist for business purposes: it is a for-profit legal form. Membership: the only members are the partners. Partners must be individuals or corporate bodies. The minimum number of partners are TWO. New partners are normally admitted by the existing partners. Partners can be of any nationality. The business is controlled by the designated members. A LLP can hold property. A LLP can borrow money in its own name. An LLP will be required to appoint at least 2 designated members. LLPs that do not carry on business as a trade or profession such as an investment company will be subject to corporation tax. The LLP is required to have a registered office in the UK.
REGISTERED LIMITED LIABILITY PARTNERSHIPS (LLP) - UK LLP ORGANISATION. SETTING LLP IN THE GREAT BRITAIN
What is a limited liability partnership? Limited liability partnerships were created by the Limited Liability Partnerships Act 2000, and are known as "LLPs". Two or more individuals, corporations, partnerships, trusts, or other entities can join together to engage in business as an LLP.
The owners of an LLP are called "partners". Partners essentially own the LLP much in the same way as partners own a general partnership and shareholders own a corporation. When an LLP engages in business activities, it is the LLP itself which actually owns and operates the business from a legal sense. Limited personal liability of the partners of an LLP means that in most situations the debts and obligations of the business engaged in by the LLP are not the personal responsibility of the partners - the debts and obligations of the business can only be paid from the income and assets of the LLP. Of course, if a business operated by an LLP has financial difficulties, each partner of the LLP could lose the amount of his or her investment in the LLP, as well as the equity built up in the business.
The key advantage of a LLP compared with a traditional partnership is that the members of the LLP (it is very important that they should not be called partners but members) are able to limit their personal liability if something goes wrong with the business, in much the same way as shareholders in a company have always been able to do. LLPs will produce and publish financial accounts with a similar level of detail to a similar sized limited company and will have to submit accounts and an annual return to the Registrar of Companies each year. The costs of setting up an LLP from £125.00.
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Choosing the entity that best suits your business and personal needs is an important decision and should not be taken lightly. Legal and tax advantages as well as disadvantages exist for each entity. It is strongly suggested that new business owners consult with both a tax accountant and an attorney to aid in making a proper decisions.
Operation of a business as an LLP may not be appropriate for all situations. Careful consideration should always be given to the choice of business organization. The desired financial and managerial relationships among the investors, the potential liabilities of the business, and consequences of various tax treatments are factors which must be considered. We recommend reviewing this site in its entirety, so that you are knowledgeable of the UK jurisdiction and the powers granted to UK LLPs.
We will guide you through the process of registering your limited liability partnership and establishing your registered identity. Complete and submit application form. Adequate completion and submission of this form, along with the provision of payment, will enable Coddan to incorporate your proposed LLP within five business days.
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UNITED KINGDOM LIMITED LIABILITY PARTNERSHIP. INTRODUCTION
From 6th April 2001 it will be possible to register UK Limited Liability Partnerships (LLPs) at Companies House. This new business entity, which will combine limited liability, corporate personality and the advantages of partnership taxation, may prove attractive not only to the professions but also to many other businesses. Limited Liability Partnership is a body corporate (with legal personality separate from that of its members) which is formed by being incorporated under the Limited Liability Partnerships Act 2000; and a Limited Liability Partnership has unlimited capacity.
The members of a Limited Liability Partnership have such liability to contribute to its assets in the event of its being wound up as is provided for by virtue of the Limited Liability Partnerships Act.
UK LLPs from only £125.00! All Inclusive LLP Registration. Each Limited Liability Partnership package includes all statutory paperwork and is fully compliant with the LLP law. All government and filing fees are included in the cost of our Economy pack. All certificates and documents will be sent directly to you by post immediately following the registration of your LLP. It will take just 5 minutes to complete the online registration form, then your LLP could be up and running within 4-6 working days.
THE FOLLOWING UPGRADES CAN BE ADDED TO THE ABOVE PACKAGE:
1. LLP Pliers Seal - £20.00. 2. Domain Name Registration for two years - £16.00. 3. Provision of a Registered Office Address for 12 months - £50.00. 4. Provision of a Nominee Designated Member for 12 months - £125.00. 5. Certificate of Good Standing - £35.00. 6. Notarisation & Apostille of Documents.
For a Limited Liability Partnership to be incorporated: TWO or more persons associated for carrying on a lawful business with a view to profit must have subscribed their names to an incorporation document, there must have been delivered to the registrar either the incorporation document or a copy authenticated in a manner approved by him, and there must have been so delivered a statement in a form approved by the registrar, made by either a solicitor engaged in the formation of the Limited Liability Partnership or anyone who subscribed his name to the incorporation document.
The incorporation document must be in a form approved by the registrar (or as near to such a form as circumstances allow), state the name of the Limited Liability Partnership, state whether the registered office of the Limited Liability Partnership is to be situated in England and Wales, in Wales or in Scotland, state the address of that registered office, state the name and address of each of the persons who are to be members of the Limited Liability Partnership on incorporation, and either specify which of those persons are to be designated members or state that every person who from time to time is a member of the Limited Liability Partnership is a designated member.
The profits of the business of an LLP will be taxed as if the business were carried on by partners in partnership, rather than by a body corporate. This ensures that the commercial choice between using an LLP or a partnership is a tax neutral one. The taxation clauses in the Act are expressed in broad terms so that the existing rules for partnerships and partners will, in general, simply apply to LLPs, and members of UK LLPs, which are carrying on businesses, as if these were partnerships and partners respectively.
The transfer of an existing business to an LLP will only be treated for tax purposes as giving rise to a cessation of the business of the partnership which is making the transfer if in otherwise identical circumstances a transfer between one partnership and another would do so. The transfer of assets between a partnership and an LLP will only give rise to chargeable gain or capital allowance consequences if, in otherwise identical circumstances, a transfer of assets between one partnership and another would so do. Similarly, Inland Revenue Statements of Practice and Extra Statutory Concessions will apply to LLPs and members of LLPs as they apply to partnerships and to partners.
CURRENT SITUATION
The final draft of The Limited Liability Partnerships Regulations 2001 have now been laid before Parliament and published by the Stationery Office. In their December 2000 Tax Bulletin (issue 50) the Inland Revenue set out their views on how members of an LLP which carries on a trade or profession will be taxed. This contains much useful information and can be accessed at (www.inlandrevenue.gov.uk/bulletins/tb50.htm). However, it specifically states that it "does not cover the detailed tax treatment of investment businesses for which the LLP structure was not originally intended". Therefore the Revenue appear to be signaling that the tax treatment for investment LLPs will not be as favourable.
BRITISH LIMITED LIABILITIES PARTNERSHIPS MAIN CHARACTERISTICS
An English LLP registered at Companies House will receive a certificate of incorporation, like a company. It will be a corporate body and will be required to file certain information at Companies House. However, it will not have share capital and will be organised and taxed like a partnership. An agreement, which will not be publicly filed, will be a practical necessity.
In addition, all business letters and order forms must show the following: limited liability; body corporate; taxed as a partnership; organisational flexibility of a partnership; partnership agreement (if any) confidential to members; accounts preparation and filing requirements broadly as for a company; ability to create floating charges. The ability to create a corporate body with limited liability which at the same time will be taxed (and largely organised) as if it were a partnership is a strong combination for the right circumstances.
Those setting up a new business may wish to consider an LLP as an alternative. Many existing partnerships may also wish to consider whether the LLP will be suitable for them. There will be stamp duty relief on the instrument transferring property from an existing partnership to a newly incorporated LLP if relevant conditions are met. Interestingly, there is no minimum amount for contribution by members in a winding up. However, there are detailed provisions designed to prevent members siphoning off funds in the event of insolvency. Parts of the Insolvency Act 1986 will apply.
LIMITED LIABILITY PARTNERSHIP MEMBERSHIP
On the incorporation of a British Limited Liability Partnership its members are the persons who subscribed their names to the incorporation document (other than any who have died or been dissolved). Any other person may become a member of a Limited Liability Partnership by and in accordance with an agreement with the existing members. A person may cease to be a member of a Limited Liability Partnership (as well as by death or dissolution) in accordance with an agreement with the other members or, in the absence of agreement with the other members as to cessation of membership, by giving reasonable notice to the other members.
A member of a Limited Liability Partnership shall not be regarded for any purpose as employed by the Limited Liability Partnership unless, if he and the other members were partners in a partnership, he would be regarded for that purpose as employed by the partnership.
UNITED KINGDOM LLP MEMBERS AS AGENTS
Every member of a Limited Liability Partnership is the agent of the Limited Liability Partnership. But a Limited Liability Partnership is not bound by anything done by a member in dealing with a person if the member in fact has no authority to act for the Limited Liability Partnership by doing that thing, and the person knows that he has no authority or does not know or believe him to be a member of the UK Limited Liability Partnership.
Where a person has ceased to be a member of a Limited Liability Partnership, the former member is to be regarded (in relation to any person dealing with the Limited Liability Partnership) as still being a member of the Limited Liability Partnership unless the person has notice that the former member has ceased to be a member of the Limited Liability Partnership, or notice that the former member has ceased to be a member of the Limited Liability Partnership has been delivered to the registrar.
Where a member of a Limited Liability Partnership is liable to any person (other than another member of the Limited Liability Partnership) as a result of a wrongful act or omission of his in the course of the business of the Limited Liability Partnership or with its authority, the Limited Liability Partnership is liable to the same extent as the member.
Designated Members: If the incorporation document specifies who are to be designated members any member may become a designated member by and in accordance with an LLP agreement with the other members, and a member may cease to be a designated member in accordance with an agreement with the other members. But if there would otherwise be no designated members, or only one, every member is a designated member.
If the incorporation document states that every person who from time to time is a member of the Limited Liability Partnership is a designated member, every member is a designated member. A Limited Liability Partnership may at any time deliver to the registrar: notice that specified members are to be designated members, or notice that every person who from time to time is a member of the Limited Liability Partnership is a designated member. A notice shall be in a form approved by the registrar, and shall be signed by a designated member of the UK Limited Liability Partnership or authenticated in a manner approved by the registrar. A person ceases to be a designated member if he ceases to be a member.
CHOOSING AN LIMITED LIABILITY PARTNERSHIP STATUS
Limited Liability Partnerships (LLPs) can provide an ideal structure for numerous businesses - not simply professional practices as is a common misconception. The only activities that cannot adopt LLP status are those that are unlawful, not intended to be profitable and which do not constitute the carrying on of a trade, profession or occupation. So, if you're contemplating setting up in business or reconsidering the structure of an existing business, an LLP could be an option worth investigating. For professional service partnerships, conversion to an LLPs may offer an attractive prospect at the moment as the number of negligence claims against professional firms are increasing, and as a result professional indemnity (PI) cover is becoming more expensive.
Unlike a standard partnership, an LLP is a corporate body with the ability to contract in its own right. The partners - known as members - are not put at risk by the negligent acts of their fellow members and their liability is limited to the amount they agree to contribute upon a winding up. For most tax purposes, however, the corporate status is ignored and members can essentially enjoy the same Income Tax, National Insurance and Capital Gains Tax treatment as partners in a general partnership.
Such advantages do not come without effort - there are registration and filing requirements that need to be adhered to. However, for many businesses LLPs offer an excellent halfway house between an unincorporated business and a company. LLPs are, technically, corporate bodies. This means they offer several commercial advantages over ordinary partnerships. Their corporate status gives them added credibility among customers and suppliers and they can find it easier to borrow because they can give the bank a floating charge over their assets - something ordinary partnerships cannot do.
When limited liability is factored in, but with the flexibility to operate day to day like an ordinary partnership (no Annual General Meetings and the related paraphernalia associated with limited companies), LLPs are suddenly a pretty serious proposition for the smaller business. Another consideration is that LLPs, like limited companies, have to make their annual accounts public by filing them at Companies House. For some businesses this is actually an advantage - although for others it's a "showstopper".
LLPs are also being used increasingly by companies undertaking joint ventures, as they offer the benefits of limited liability without the disadvantages of having an subsidiary company. An LLP is a flexible vehicle that should at least be considered for every business start-up; every joint venture; every professional practice; every business with chargeable assets and for collective investment arrangements.
LIMITED LIABILITY PARTNERSHIP CHARGES
If an LLP creates a mortgage or charge over its property this will require registration at Companies House within 21 days of its creation if it covers certain types of property such as land or buildings or book debts or if it is a floating charge. The original mortgage or charge document must be submitted to Companies House along with the relevant form. If a charge is not registered in time it will be void against the liquidator or administrator of the LLP or against any of its creditors. Late registration is only permitted with the sanction of a court order.
An LLP is required to keep a register of charges at its registered office and to enter in this details of all charges created (this applies even to charges that are not registrable at Companies House). It must also keep available for inspection by any member or creditor of the LLP copies of any charge instruments relative to charges it has created that are registrable at Companies House. If a registered charge is satisfied, Form LLP 403 (a) or LLP 403 (b) (declaration of satisfaction) may be submitted to the Registrar in order that the register of charges may be updated. Special provisions apply to mortgages and charges created by Scottish LLPs.
UNITED KINGDOM PARTNERSHIP AGREEMENT FINANCIAL ISSUES
All the financial issues below should be taken into consideration in a partnership agreement.
Capital Investment: The agreement should state how much financial input each partner is have. Capital investment from each partner is how the business will finance itself and purchase the assets needed to run the business.
Income and Share of Profits: You will need to consider how much, if any, each partner will take from the business as a salary. This will be before profits are distributed and can be used to reflect the different roles and work input of each partner. Also, you may wish to award partners interest on their capital contributions. This can be paid before profits are distributed to reflect any differences in capital investment. Unless expressly agreed, the Partnership Act states that each partner will share profits equally.
If you want to share profits in different ratios, for example, to reflect seniority, then this will have to be expressly stated. You will also need to address the issue of how any losses will be shared.
Withdrawals: A potential source of disagreement between partners is the amount of money each is entitled to draw from the business. Some may wish to store a higher percentage of profits in the business to maintain a healthy balance, whilst other partners may want to withdraw their share of the profits immediately. It is important, therefore, to agree on a limit on drawings, for example, a set monthly amount.
Shares in Asset Value Changes: In the situation where a fixed asset of the firm, such as a warehouse, is sold at a profit, how is this profit to be shared? Under the Partnership Act this will be in equal proportions unless stated otherwise. It may be important, therefore, to expressly agree on what is to be done in this situation if this profit is not to be shared equally.
Ownership of Business Assets: The business may acquire assets during its life, partners may allow the business to use assets that they own or a partner may use the value of one of their own assets to represent their capital investment in the business. It is; therefore, important to stipulate which are the partnership's assets and which belong to an individual partner. Disagreement over the ownership of assets may occur when dissolving the partnership.
If the partnership is likely to prove quite complicated or there are substantial amounts of money or assets involved, you should seek advice from a solicitor. The above information, however, will help you be informed about the most important issues and enable you to consider relevant matters with your other partners.
PARTNERSHIP AGREEMENT OPERATIONAL ISSUES
All the operational issues below should be taken into consideration in a Partnership Agreement.
Degree of Commitment: It is important to consider how much work each partner is to do in the business. For example, a 'sleeping partner' whose involvement is purely financial, will not want to be required to take part in the daily running of the business. Also, some partners may want to work part time whilst others are to work full time. The Partnership Act will imply that each partner has the right to take part in the daily management of the business unless stated to the contrary. An agreement should set out, therefore, the degree of commitment of each partner. For a full time working partner this may be expressed as 'devoting his/her whole time and attention to the business.
Sickness, Absence and Holidays: When considering the degree of commitment that the partners are to have, you should address the issue of absence from the business. It is important to consider what will happen, for example, when a partner needs maternity leave or is suffering from long-term incapacity. You will have to qualify the duty of any full time partner to devote all his/her time and attention to the business with whatever is decided on about time off for holidays, sickness or other absenteeism.
Roles: It is important to state the different functions each partner is to have within the firm and the extent of their authority. For example, one partner may be in charge of sales whilst another is in charge of purchasing. The agreement might state that a particular partner only has a set amount of authority, for example, to enter into contracts less than £10,000.00 in value, or alternatively, that a partner has authority to do whatever they feel is in the best interests of the business within their area. Any partner ignoring a restriction or the scope of their role may be liable for breach of contract.
Decision-Making: Unless otherwise agreed, all partnership decisions will be made on a majority basis by one partner one vote. However, if it is a decision on changing the nature of the business or the introduction of a new partner, then every partner must agree. It may well be, therefore, that this is not what partners in a particular business want. For example, it may be a good idea to state that certain decisions can be made by one partner alone, such as buying stock, other decisions require a majority vote, such as employing staff, whilst others require the consent of all the partners, such as buying new premises.
If the partnership is likely to prove quite complicated or there are substantial amounts of money or assets involved, you should seek advice from a solicitor. The above information, however, will help you be informed about the most important issues and enable you to consider relevant matters with your other partners.
UNITED KINGDOM PARTNERSHIP AGREEMENT TERMINATION ISSUES
All the term and termination issues below should be taken into consideration in a partnership agreement.
Duration: The Partnership Act provides that unless agreed to the contrary, any partner can terminate the partnership at any time by giving notice to the others. This notice will take effect immediately and does not have to be in writing. This means that a partnership can seem very insecure and uncertain if a particular duration for it is not agreed on.
There are a number of ways of giving a partnership more security. Firstly, you can put a clause in the agreement stating that a partner must give a set period of notice before ending the partnership. A period of 6 months or more, for example, would allow the partnership time to find a new partner. Alternatively, you can agree that the partnership is to last for a fixed term during which it cannot be ended by one of the partners. Once the period has ended it could then continue on the same terms, but could be terminated by a partner giving a period of notice.
Lastly, you could provide that the partnership is to continue for as long as there are at least two partners in the firm. This would allow partners to leave without requiring the business to end. You should also consider the possibility of a partner dying or becoming bankrupt. The Partnership Act says that if this happens then the partnership will end. It is worthwhile, therefore, to consider a clause that the partnership will continue in this situation, as long as the other partners can pay for the deceased's or bankrupt's share of the business.
U.K. LLP
LLP Main Characteristics
£ 125.00
This is our most popular package with UK residents, and includes:
The filing and registration of your LLP
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