Are you a business owner looking to register a limited liability partnership here in the UK?
In this article, I will be sharing with you how to register a limited liability partnership in the UK, the pros and cons of registering a limited liability partnership for your business so that you can actually make a decision as to whether this is the best legal structure for your business.
WATCH THE VIDEO: Registering an LLP Company In the UK
What is a Limited Liability Partnership?
Now a limited liability partnership is a legal structure in which some or all of the partners involved have limited liability.
What is the difference Limited liability Partnership vs limited company?
One of the primary ways in which a limited liability partnership differs from a limited company is the fact that an LLP, you usually tend to have only members, whereas in a limited company structure your company structure will actually tend to have company directors, as well as shareholders within that legal structure.
Now, when you’re thinking of forming a limited liability partnership, one thing you must bear in mind is the fact that you must have at least two designated people to actually register your business under a limited liability partnership structure.
Let’s talk about some of the advantages that you can get with registering your business under an LLP.
Advantages of LLP
- Contracts
Now, one of the advantages of actually registering your business under an LLP is the fact that it’s a legal entity by its own right, which basically means that it can enter contracts directly and also hire employees.
- Protection of Business Name
A second benefit is the fact that your business name will actually be protected in law, which means that you are able to prevent other businesses from registering a similar business name as yours.
- Entry/Exit of members
New members can be added or removed quite easily. This is different compared to when you register your company as a limited company.
Now before you actually go ahead to register your business as an LLP, I need to share with you some of the disadvantages of actually registering your business as a limited liability partnership structure.
Disadvantages
- Issue of Share Capital
One of the biggest disadvantage of registering a limited liability is the fact that if you wish to actually grow your business through the issue of share capital, then you won’t actually be able to do this.
This type of business structure tends to work best for businesses that want legal protection from any form of liabilities that may occur during the course of their business.
This type of business structure is commonly used by professions including; Doctors & Lawyers.
- Disclosure Requirements
Running a company via limited liability partnership means that you are legally required to file your accounts with companies house and financial information regarding the company will be made publicly available.
- Members Exit
If your membership only has 2 members and one of those members decides to leave the LLP, then your LLP will have to be dissolved as you cannot have a Limited liability Partnership structure with less than 2 members.
- Tax
Each partner within an LLP structure will be taxed according to their individual tax brackets, it provides fewer benefits than you would have compared to registering your business under a limited company structure.
Common F.A.Qs
There is no upper limit to the number of members you can have within an LLP. It’s worthwhile thinking about the number of designated members you wish to have within your LLP when considering the longevity of your business in the future.
Interested in registering an LLP Company in the UK? Contact us today for more information on registering your company in the UK.
