A limited liability partnership is a new form of legal business entity with limited liability.
The main features of limited liability partnerships are that they have organizational flexibility but are taxed as partnerships. In many other respects, they are very similar to companies.
The members’ exemption from UK tax is only applicable provided that no business or trade is carried out with or within the United Kingdom.
The tax authorities in the United Kingdom have confirmed that the taxation base of a limited liability partnership will follow the procedure operated in the past for partnerships. The limited liability partnership itself will not be liable for taxation on profits or gains arising within the partnership, but the profits or gains will be assessed to tax separately on the individual partners.
Any person or legal entity can be a partner in a UK LLP. There are no restrictions on the nationality or residency of the partners, i.e. LLP partners may be either residents or nonresidents of the UK;
UK LLP taxation is advantageous when its partners are foreigners. Its income is passed through to its partners and taxed at the individual partner level, without any income tax assessment at the LLP entity level.
- A UK LLP is as flexible business tool as the members make it according to their needs.
- An LLP in UK can have a VAT number, which is an advantage for those trading within Europe.
- An LLP must be formed for the purpose of carrying on a lawful business with a view to profit.
- A UK LLP must start trading within a year of its incorporation; otherwise it will be struck off by Companies House.
A UK LLP can have at least two or more members (partners) with equal responsibilities. The profit of an LLP is divided between the partners in the proportion of their participation in the LLP.
Details of all UK LLP members must be recorded with the Companies House and therefore are available to the public.
A UK LLP must have at least two, formally appointed, Designated members. Designated members have the same rights and duties towards the LLP as any other member. However, they are responsible to perform specific rights and duties (like signing the Company Accounts, signing any changes on forms for Companies House, signing the company Annual return) on behalf of the LLP.
All the members of a UK LLP must draw an Agreement. This is the main document that declares the company structure, corporate activities, the rights and duties of members, the share percentages, etc. If a corporate bank account is opened, this Agreement must be shown to the bank, and there must be a minute to open the Bank Account.
The UK LLP agreement also covers the relationship between the members and the separate corporate entity, which is the LLP.
In order to start with the procedure please send us the following documents:
- Name of the company (2-3 suggestions)
- Certified copy of the passport (for each owner, member…)
- Proof of the address (utility bill, bank statements, bank reference letter)
- Payment to the EURO COMMERCE LLC bank account