Incorporating an LLP

Limited Liability Partnerships (LLPs) retain the flexibility of a partnership with the added advantage that a partner's personal liability is limited. At least two members must be 'designated members' and the law places extra responsibilities on them.

The formation of an LLP is more complex and costly than that of a conventional partnership. Problems can still arise when there are disagreements between the members. There is also the prospect of paying more tax on higher profits than a company would. LLP members' earnings are subject to Income Tax rates, possibly at higher rates, whereas companies pay a maximum 25% Corporation Tax. 

The procedure for incorporating a limited liability partnership (LLP) and the controls applied to the use of certain LLP names is included within the guidance published by Companies House entitled Set up and run a limited liability partnership (LLP).

The guidance also explains more about members responsibilities. This guide applies to all LLPs registered in the United Kingdom (UK) i.e., England, Wales, Scotland and Northern Ireland.