Call us 0800 0523 555

Contact Us

*COVID-19 update: Many of our shops and offices are now open for face to face meetings with strict social distancing measures in place. We also offer telephone and video consultations for all new clients in order to discuss your needs. Find the latest COVID-19 information available for your business.

Limited Liability Partnerships

I am thinking of going into business with two friends and one of them has said that a Limited Liability Partnership would be a good idea. What are they and do you think it is beneficial for us to operate as one?

A Limited Liability Partnership (LLP) is similar to an ordinary partnership - in that a number of individuals or limited companies share in the risks, costs, responsibilities and profits of the business.

The difference is that liability is limited to the amount of money they have invested in the business and to any personal guarantees they have given to raise finance. This means that members have some protection if the business runs into trouble, compared to normal partnership rules where there is no limit on the members' liability if the business becomes insolvent.

Each member of the partnership must register as self employed, and is therefore subject to the same Income Tax and National Insurance class 2 and 4 system as a member of a standard partnership. The main difference is that the LLP must file accounts with Companies House.

Generally speaking, firms of accountants who wish to limit their professional negligence exposure use LLPs as limited companies cannot become auditors. For most businesses, a company limited by shares is generally the best entity to trade through when friends enter into business together. However, you must always seek professional advice before committing yourself to any business venture so please ensure you speak to your local TaxAssist Accountant before proceeding.

Call us today to make an appointment with your local office

Consultations available by telephone or video

0800 0523 555

Contact Us