Limited liability partnership
A limited liability partnership is legally similar to a company. It is administered like a company in all aspects except its taxation where it is treated like a partnership. The higher level requirements for limited liability partnerships are as follows:
- The LLP must be registered at Companies House
- Annual accounts must be filed at Companies House
- An Annual Return must be completed each year to update Companies House with basic details relating to the company, and there will be a small annual fee.
- HMRC must be informed if the LLP has any profits or taxable income in a Company year.
- The LLP must complete an annual HMRC self assessment tax return
- The LLP does not pay tax instead partners pay tax NIC on their share of profits under self assessment rules
- Anyone employed by the company must pay income tax and national insurance on their income.
LLPs have the limited liability, administrative and statutory obligations of a company but not the taxation and national insurance flexibility. This structure is most suitable for medium and large-sized partnerships.
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