Q&As

Can you provide guidance on converting an LLP to a limited company. Would a business transfer agreement to transfer the assets and liabilities of the LLP into a limited company be sufficient? Also are there any other considerations eg tax and insolvency?

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Published on LexisPSL on 11/02/2016

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • Can you provide guidance on converting an LLP to a limited company. Would a business transfer agreement to transfer the assets and liabilities of the LLP into a limited company be sufficient? Also are there any other considerations eg tax and insolvency?
  • Tax considerations

Can you provide guidance on converting an LLP to a limited company. Would a business transfer agreement to transfer the assets and liabilities of the LLP into a limited company be sufficient? Also are there any other considerations eg tax and insolvency?

It is not possible to convert a LLP to a limited company but this can be achieved commercially by the LLP transferring its assets and liabilities to the limited company pursuant to a business transfer agreement.

We do not have a specific precedent dealing with the transfer of a business from a LLP to a limited company, but it should be possible to adapt the following precedents which deal with the transfer of a business from a general partnership to a LLP:

  1. Transfer agreement—conversion of general partnership to limited liability partnership (this will be the principal document transferring the LLP’s business, assets and liabilities to the company)

  2. Deed of novation—conversion of general partnership to limited liability partnership (this will deal with the transfer of individual contracts)

  3. Deed of assignment—conversion of general partnership to limited liability partnership (this will deal with the transfer of individual contracts)

Specific issues to be aware of when preparing the transfer agreement include:

  1. Parties—as a LLP is a body corporate with a legal personality separate from its members (unlike a general partnership), it is not necessary for the members to be

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