Limited Liability Partnership (LLP) - an introductionLimited Liability Partnerships are a relatively new business structure, introduced in the Limited Liability Partnerships Act 2000. The best way to describe a limited liability partnership (LLP) is as a hybrid between a limited company and a traditional partnership.
Just as with a limited company, a limited liability partnership is formed at Companies House, with it’s own registration number and unique name. Again, using the Yummy Cake Shop example, a limited liability partnership would be known as:
Yummy Cake Shop LLP
The limited liability partnership would be under the same naming restrictions as a limited company. Again, as with a limited company, it is a separate legal entity in it’s own right, and can enter into contracts as a legal person. The difference is that a limited liability partnership is made up of members who are much like partners in a partnership. Each limited liability partnership has two designated members who are required to file the accounts for the partnership and to sign the accounts.
Each partner is taxed in the same way as a partner in a partnership, and for VAT purposes the limited liability partnership is deemed to be a partnership, despite being a separate legal entity. There has recently been some legislation passed which puts an additional taxation burden on members who are deemed by HM Revenue & Customs to actually be ‘employees’.