The Limited Liability Partnership (LLP) is a form of company in the form of UK incorporated by non-UK-resident. An LLP is a separate legal entity, allowing for a UK incorporated entity to be managed and controlled from anywhere in the world with a few reporting requirements to the Registrar of Companies and no reporting requirements to the Inland Revenue. The UK LLP is considered to be the alternative to the Delaware LLC.
The key characteristics of an LLP can be summarised as follows:
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An LLP is a separate legal entity under UK law, a corporate body.
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An LLP has unlimited capacity
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All the members of an LLP have limited liability
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All the members of an LLP can, and commonly will, participate in the carrying on of the LLP’s business.
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The relationship between the members themselves and the members and the LLP may be governed by a written membership agreement; any such agreement will be a private document (ie, there is no requirement to file it with the Registrar of Companies).
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Annual returns and annual accounts must be filed with the Registrar of Companies.
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An LLP is fiscally transparent, for UK tax purposes, in the same way as general partnerships and Limited Partnerships are.
The process of incorporating an LLP is similar to that for a limited company. An LLP is incorporated by delivering an incorporation form which contain details of the name of the LLP, the legal domicile of the LLP, the names and addresses of each of the members (including the designated members) of the LLP and the registered office address of the LLP, to the registrar of Companies. An incorporation fee must also be paid. Changes to the designated or non-designated status of any member can be made at any time with the agreement of the other members, provided that the minimum requirement of having at least two designated members is always complied with, and the relevant changes are notified to the Registrar of Companies.
The profits (and losses) of an LLP will be directly attributed to its members, in accordance with the terms of the profit (and loss) sharing agreements set out in any oral or written membership agreement, subject to statutory adjustments in respect of, for example, relief of losses.
It is perfectly acceptable for all members of an LLP to be non-UK incorporated and non-UK resident companies, and for any trade or investment business of the LLP to be conducted wholly outside the UK
If you are interested in incorporating a UK LLP please
contact us.
With references to: Matthew Cain, Partner, Wiggin Osborne Fullerlove, and Katie Southgate, Solicitor, Wiggin & Co, Cheltenham UK, 2003
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