LLP Flashcards
What is a Limited Liability Partnership (LLP)?
A hybrid vehicle offering flexibility of partnership with limited liability for members.
In what scenarios are LLPs particularly useful?
For joint ventures, certain investment schemes, and some venture capital investments.
What is the tax status of LLPs?
LLPs are tax transparent.
What is required for the formation of an LLP?
Two or more persons associated carrying on a lawful business can incorporate an LLP
What form is used to register an LLP?
Form LL IN01 with a fee.
What does the Registrar of Companies issue upon successful registration of an LLP?
A certificate of incorporation.
What are the ongoing filing obligations for an LLP?
- Accounts
- Annual Confirmation Statement
- creation of charges
- changes in membership
- change in registered office
- change of office
- maintain in-house records.
Who are considered members of an LLP?
Those who subscribed to the incorporation document and those who became members later by agreement.
How many formally appointed members are required in an LLP?
At least two formally appointed members at all times. At least two must be designated members.
What is the role of designated members in an LLP?
They sign accounts and make filings at Companies House; act on behalf of LLP if it is wound up.
Under what circumstances does a member cease to be a member of an LLP?
If they die, give notice, agree with other members, or if the member is a company that is then dissolved.
What is the statutory framework for an LLP Agreement?
There is no particular statutory framework for an LLP Agreement.
Are members of an LLP required to have a formal Members’ Agreement?
Members of an LLP are not obliged to have a formal Members’ Agreement to regulate their relationship.
What are the eleven default provisions of an LLP?
The eleven default provisions include:
1. Equal share in profits and capital.
2. LLP must indemnify members.
3. Every member may manage.
4. No member entitled to remuneration for managing.
5. Cannot join without consent of all existing members.
6. Ordinary decision making by majority of members.
7. Books and records must be available for inspection by members.
8. True accounts by all members.
9. If a member competes with the LLP, must account for and pay profits made.
10. Every member has a duty to account for benefits derived from transactions with LLP and business or property.
11. No implied power of expulsion.
How are LLPs taxed?
LLPs are not taxed, but the partners are.
How are assets treated for CGT purposes in an LLP?
Assets are treated as being held by members as partners for CGT purposes.
What relief is available when a partnership is incorporated as an LLP?
There is relief from stamp duty when a partnership is incorporated as an LLP.
Can an LLP register for VAT?
Yes, an LLP may register itself for VAT.
