How to set up an LLP

Produced by Tolley in association with Jackie Barker of Wells Associates

The following Owner-Managed Businesses guidance note Produced by Tolley in association with Jackie Barker of Wells Associates provides comprehensive and up to date tax information covering:

  • How to set up an LLP
  • Key requirements to form an LLP
  • Incorporation application to form an LLP
  • Self-assessment registration when forming an LLP
  • Other general formalities to form an LLP

How to set up an LLP

This note explains the legal requirements that must be met in connection with the incorporation of a Limited Liability Partnership (LLP), what forms need to be completed to register the LLP with the relevant authorities and the practical steps that need to be taken.

Key requirements to form an LLP

An LLP must be formed for the purpose of carrying on a lawful business with a view to making a profit. At least two persons must form the LLP, known as the initial subscribers, who may include individuals, companies, trustees and / or other LLPs.

The subscribers of an LLP are known as members. There is no limit to the number of members who can be appointed and the only restrictions are that members must not:

  1. have been disqualified from acting as a company director or member of an LLP, or

  2. be an undischarged bankrupt

It is possible for a minor to be appointed as a member of an LLP if it is commercially justifiable to do so, although generally, this is unlikely.

An LLP must have at least two members who will act as the designated members. Every member is an agent of the LLP and it is bound by the actions of those members. However, designated members also have the following extra responsibilities. These are:

  1. appointing an auditor if required

  2. signing the accounts on behalf of the members

  3. delivering the accounts to the registrar

  4. notifying the registrar of any changes to the LLP or its members

  5. preparing and delivering an annual return form, and

  6. acting on behalf of the LLP if it is wound up

In this regard, designated members are very similar to directors of companies and are legally accountable for any failure to carry out th

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