The UK business environment offers a variety of company formation options, which include public or private limited companies, companies limited by shares or guarantee, or a Limited Liability Partnership (LLP). It is the flexibility provided by an LLP that makes these the most preferred option for big firms, such as accounting and solicitor firms.
The legal framework of this type of business structure was created by the Limited Liability Partnership Act 2000. The main purpose of designing this business structure was to protect big professional partnerships, such as law and accountancy firms, from negligence actions. Like other business structures, an LLP in the UK is also regulated by the Companies Act 2006.
The only difference is that the structure of management in this case is fixed by the partnership agreement. One of the benefits of such company structure is that loans can be availed at floating rates.
The Companies Act 2006 has been formed after integrating all the preceding laws regulating companies in the UK. For carrying out business in the UK, these laws make for two types of business entities: partnerships and companies.
Main Provisions of the Limited Liability Partnership Act 2000
The main provision of this type of business structure is enshrined in the Limited Liability Partnership Act 2000. The Act allows the partners of the company to have liability up to a certain point. For general trading debts, the Act allows a limited liability. However, the personal liability of the partners in this structure is not limited.
In such business structures in the UK, the conduct of business is done by ‘designated members’ and the ‘members.’ The responsibility of the designated members is similar to that of a director or a secretary in a limited company. The responsibility of providing capital lies with the members. Since the working capital is provided by the members, they also share the profits. In this case, the profit would reflect the partnership rather than the dividends that is paid in case of companies.
One of the requirements of a limited liability partnership is the agreement between the members of the partnership. The process of forming the partnership becomes very easy if you get professional help from specialised agents. One such agent who can help you in getting a basic LLP agreement is the Company Formations 247. The agent can offer you all help, right from providing information to the registration process.
The legal framework of this type of business structure was created by the Limited Liability Partnership Act 2000. The main purpose of designing this business structure was to protect big professional partnerships, such as law and accountancy firms, from negligence actions. Like other business structures, an LLP in the UK is also regulated by the Companies Act 2006.
The only difference is that the structure of management in this case is fixed by the partnership agreement. One of the benefits of such company structure is that loans can be availed at floating rates.
The Companies Act 2006 has been formed after integrating all the preceding laws regulating companies in the UK. For carrying out business in the UK, these laws make for two types of business entities: partnerships and companies.
Main Provisions of the Limited Liability Partnership Act 2000
The main provision of this type of business structure is enshrined in the Limited Liability Partnership Act 2000. The Act allows the partners of the company to have liability up to a certain point. For general trading debts, the Act allows a limited liability. However, the personal liability of the partners in this structure is not limited.
In such business structures in the UK, the conduct of business is done by ‘designated members’ and the ‘members.’ The responsibility of the designated members is similar to that of a director or a secretary in a limited company. The responsibility of providing capital lies with the members. Since the working capital is provided by the members, they also share the profits. In this case, the profit would reflect the partnership rather than the dividends that is paid in case of companies.
One of the requirements of a limited liability partnership is the agreement between the members of the partnership. The process of forming the partnership becomes very easy if you get professional help from specialised agents. One such agent who can help you in getting a basic LLP agreement is the Company Formations 247. The agent can offer you all help, right from providing information to the registration process.
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