Why should I consider a Limited Liability Partnership (LLP)?

Legal tips on the benefits and drawbacks of forming a Limited Liability Partnership LLP

Limited liability partnerships (LLPs) combine some of the features of traditional partnerships with those of limited companies. Like limited companies, LLPs are viewed as legal entities responsible for their own debts (unlike a partnership, in which the partners are liable for any debts). This is one of the main reasons that people decide to form an LLP rather than a partnership.

Although there are some additional obligations placed on an LLP, such as submitting annual accounts to Companies House, most of the structural flexibility of a partnership remains, as does the tax rate. However, it is not as easy for an LLP to raise money as it is for a company and the number of members of an LLP is limited to 20.

Therefore, LLPs are suitable if you want the flexibility of a partnership, but with less risk to personal capital and are willing to meet the administrative costs of an LLP.

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