Limited Liability Partnership
Introduction
There are many different forms of business entities available, a recent one being limited liability partnerships (LLP), created by the Limited Liability Partnership Act 2000 (LLPA). This act came into force on the 6th of April 2001. As, LLP’s have qualities similar to partnerships, they are seen as a hybrid between a partnership and a company.
An LLP is a ‘corporate body’ with ‘separate legal personality’, distinct from its members. Members enjoy limited liability and are not jointly and severally liable for the debts of the business. This is beneficial as it provides protection of individual assets to members. LLP’s also have ‘unlimited capacity,’ meaning they can hold property in its own name, can sue and be sued. An LLP is not a partnership; however, partnership law may apply if specifically stated. Additionally, ‘separate legal personality’ of an LLP, is only present after incorporation.
Incorporation
One essential characteristic of an LLP is that a minimum of two members with a view of making profit are required. LLP’s are formed by subscription when members complete an incorporation document encompassing various details.
It is the duty of the original members to check the Registrar’s index of names, to ensure the business name is not in use and is lawful, as various restrictions apply, an example being the use of ‘LLP’ at the end of the business name. Before registering the incorporation document, with the relevant fee, it must be signed and dated by each member, and include a statement which confirms all requirements of incorporation are complete.
Once the incorporation form is registered, the Registrar issues a ‘Certificate of Incorporation,’ and trading commences afterwards. Partnerships may become LLP’s, by virtue of the LLPA, through registration. Further detailed instructions on incorporation procedures are available on the Companies House website.
Membership
Members of LLP’s have the same legal duties and responsibilities
There are many different forms of business entities available, a recent one being limited liability partnerships (LLP), created by the Limited Liability Partnership Act 2000 (LLPA). This act came into force on the 6th of April 2001. As, LLP’s have qualities similar to partnerships, they are seen as a hybrid between a partnership and a company.
An LLP is a ‘corporate body’ with ‘separate legal personality’, distinct from its members. Members enjoy limited liability and are not jointly and severally liable for the debts of the business. This is beneficial as it provides protection of individual assets to members. LLP’s also have ‘unlimited capacity,’ meaning they can hold property in its own name, can sue and be sued. An LLP is not a partnership; however, partnership law may apply if specifically stated. Additionally, ‘separate legal personality’ of an LLP, is only present after incorporation.
Incorporation
One essential characteristic of an LLP is that a minimum of two members with a view of making profit are required. LLP’s are formed by subscription when members complete an incorporation document encompassing various details.
It is the duty of the original members to check the Registrar’s index of names, to ensure the business name is not in use and is lawful, as various restrictions apply, an example being the use of ‘LLP’ at the end of the business name. Before registering the incorporation document, with the relevant fee, it must be signed and dated by each member, and include a statement which confirms all requirements of incorporation are complete.
Once the incorporation form is registered, the Registrar issues a ‘Certificate of Incorporation,’ and trading commences afterwards. Partnerships may become LLP’s, by virtue of the LLPA, through registration. Further detailed instructions on incorporation procedures are available on the Companies House website.
Membership
Members of LLP’s have the same legal duties and responsibilities