The three partnership structures at a glance

The table is a recognition tool. It does not replace examination of the actual agreement, ownership chain, jurisdiction, regulated status, tax position or intended conduct.

When an LLP corresponds to the intended organisation

An LLP is incorporated under the Limited Liability Partnerships Act 2000. It is a body corporate with legal personality separate from its members and can own property, contract and incur obligations in its own name.

The LLP uses members rather than shareholders and directors. It must have at least two designated members, who carry additional statutory administration and filing responsibilities. All members may be designated, or the members may specify which of them will hold that status.

An LLP may deserve examination where:

• two or more people or bodies will be genuine members;
• all or several members expect to participate in management;
• the members want flexibility in profit sharing, decisions, admission and retirement;
• an LLP agreement can express their intended relationship;
• share capital is not the natural ownership instrument; and
• the organisation can maintain LLP accounts, confirmation statements and event-driven filings.

The phrase “limited liability” does not mean that no member can ever face personal exposure. Personal wrongdoing, guarantees, contractual commitments, insolvency provisions and other facts can remain relevant.

Proceed to UK LLP formation
Proceed to international or overseas-member LLP formation where cross-border facts affect acceptance.

When an ordinary limited partnership corresponds to the intended organisation

An ordinary limited partnership must have one or more general partners and one or more limited partners. The general partner manages the firm and is liable for all its debts and obligations.

A limited partner contributes capital or property valued at a stated amount and is generally not liable beyond the contribution, provided the statutory conditions are respected. Under the current regime, a limited partner who takes part in management becomes liable for debts and obligations incurred while doing so. A limited partner has no power to bind the firm.

An ordinary LP may deserve examination where:

• the organisation genuinely separates active management from passive investment;
• the proposed general partner understands and can carry its responsibility;
• limited partners will not act as ordinary managers;
• the partners have or can identify a genuine principal place of business; and
• the agreement can express contributions, returns, authority, admission, exit and winding-up arrangements.

For an LP registered in England and Wales or Northern Ireland, registration does not by itself give the firm separate legal personality. The current registration concept is a principal place of business, not an LLP registered office.

Proceed to ordinary UK limited-partnership formation

What makes a Scottish limited partnership different

A Scottish limited partnership uses the same fundamental general-partner and limited-partner model. Its important distinction is separate legal personality: Scots law treats the firm as a legal person distinct from its partners.

That feature may affect the holding of rights, contracting, litigation and organisational continuity. It must not be confused with the statutory limited-liability structure of an LLP.

An SLP:

• is not an LLP or company;
• has general and limited partners, not LLP members;
• retains a general partner liable for the firm’s debts and obligations; and
• does not give every participant limited liability merely because the firm has separate personality.

An SLP also has current transparency obligations. It must establish and maintain its registrable PSC position, report required changes and deliver an SLP confirmation statement at least annually.

An SLP may deserve examination where both the limited-partnership model and the separate personality of a Scottish firm are relevant to the genuine intended organisation. It should not be selected as a label for an activity with no genuine Scottish organisational basis or promoted as an opaque structure.

Separate legal personality is not the same as limited liability

Legal personality asks whether the organisation is treated as a person distinct from its participants. Limited liability asks when and to what extent a participant may be personally answerable for obligations.

An LLP combines separate legal personality with a statutory limited-liability structure for its members, subject to personal conduct, guarantees, commitments and other exceptions.

An SLP has separate legal personality, but its general partner remains liable for all the firm’s debts and obligations. The existence of the SLP as a distinct legal person does not give its general partner the protected position of an LLP member.

An ordinary LP registered in England and Wales or Northern Ireland normally lacks separate legal personality and also uses the general-partner and limited-partner allocation.

These concepts must remain separate when ownership, contracting and risk are considered.

Management and binding authority often decide the route

The intended behaviour of the participants frequently provides the clearest signal:

• Where participants will manage together as members, an LLP may correspond more naturally to the organisation.
• Where one or more general partners will manage for passive limited partners, an ordinary LP or SLP may correspond more naturally.
• Where an intended “limited partner” expects ordinary management powers, the proposed LP arrangement requires reconsideration.
• Where ownership should be represented by shares and directors will manage for shareholders, the choice has moved to the LLP-versus-company comparison.

A registration label cannot repair a contradiction between the role stated on a filing and the role a participant is expected to perform in practice. The governance instrument should correspond to the actual management and authority arrangements.

Compare an LLP with a private limited company only where a company or another non-LP structure is the genuine alternative.

Liability and control questions to settle before formation

The participants should identify:

1. Who will contract with customers, suppliers, lenders and property owners?
2. Will any participant give a personal or corporate guarantee?
3. Who will make ordinary management decisions?
4. Will a passive investor require consultation or veto rights, and could those rights affect the management boundary?
5. What capital, property or services will each participant contribute?
6. How will profits and losses be allocated under the agreement?
7. Is a corporate general partner proposed, and who covers and controls it?
8. Does professional or sector regulation impose responsibility irrespective of the chosen vehicle?

Coddan can identify and prepare the appropriate filing and document route within the accepted service scope. Legal advice on personal exposure, disputed rights, enforceability or a bespoke control arrangement belongs to a solicitor.

Governance instruments

An LLP does not have articles of association. Its internal arrangements operate within the statutory framework and the agreement among the members. The LLP agreement can address contributions, profit shares, drawings, decisions, duties, authority, admission, retirement, restrictions, deadlock and dissolution. Statutory default provisions may apply where the members have not agreed a matter.

An ordinary LP or SLP uses a partnership agreement suited to the general-partner and limited-partner structure. It should distinguish management authority, limited-partner rights, contributions, distributions, admissions, transfers, exit and winding-up arrangements.

Companies House does not issue or approve an LLP or partnership agreement. Coddan can provide document preparation within its approved service scope. Negotiated rights, enforceability opinions, disputes and legal advice remain matters for a solicitor.

Place, jurisdiction and public filing consequences

An LLP has a registered office in its jurisdiction of registration. It must deliver annual accounts and a confirmation statement and report specified changes. Designated members carry the additional statutory responsibilities associated with those obligations.

An ordinary LP is registered with general and limited partners and a principal place of business. Its current filing regime is not the same as the LLP annual-accounts and confirmation-statement model.

An SLP has a principal place of business in Scotland and must comply with its current PSC and annual confirmation-statement duties, together with applicable change filings.

The filing burden is part of the organisation selected, not merely an administrative inconvenience. The people or organisations involved should consider whether they can maintain the records, evidence, agreement and public filings required by the proposed structure before it is registered.

Tax and accounting require the participants’ actual facts

Partnership forms are frequently described as tax transparent, but that expression does not determine the outcome for a particular participant.

A qualifying trading LLP is generally treated as a partnership for tax purposes, with profits allocated among members. Individual and corporate members can have different tax treatment and separate registration and return responsibilities. The activity, residence, allocations, employment-status provisions, anti-avoidance rules, overseas bodies and investment or regulated circumstances can all matter.

An LP or SLP likewise does not produce one universal tax result. Scottish separate legal personality does not, by itself, establish a different general tax outcome.

This page identifies tax as a possible decision dependency. It does not recommend a structure on tax grounds or provide an individual tax conclusion. Where tax could determine the route, an appropriately responsible accountant or tax adviser should provide that conclusion before formation.

The specialist PFLP route

A private fund limited partnership is a specialised limited-partnership route for a qualifying collective investment scheme. It is not a fourth general comparison option for an ordinary trading business.

Where the facts indicate a fund, collective-investment arrangement or regulated question, the relevant professional must accept responsibility for conclusions concerning the written agreement, collective-investment-scheme condition, FSMA and FCA implications, tax treatment and suitability.

Coddan therefore treats PFLP work as adviser-cleared and enquiry-only until the required conclusions have been supplied.

Current law and announced limited-partnership reforms

This comparison reflects the position verified on 22 September 2026.

Current LLP identity-verification rules apply to individuals within the director-or-equivalent category, which Companies House says includes members, general partners and managing officers. PSCs have their own verification and personal-code obligations. Companies House identifies corporate LLP members and limited partnerships as later identity-verification implementation stages.

Companies House has announced wider limited-partnership reforms under the Economic Crime and Corporate Transparency programme. Its transition plan says those reforms will take place no sooner than the end of 2026 and that advance notice will be given before the relevant requirements take effect.

No authoritative commencement source reviewed for this master brings the wider LP reforms into operation. Proposed future address, information, filing, verification or agent requirements must therefore not be treated as current obligations.

Optional Coddan partnership-structure assessment

The comparison above is complete. A you who can identify the appropriate structure does not need to purchase an assessment and may proceed directly to the corresponding formation route.

The assessment is available where the intended organisation remains uncertain because material facts concerning the participants, management, capital, jurisdiction, liability or professional dependencies have not yet produced a clear route.

Continue to the recognised partnership route

• Form a UK LLP
• Form an ordinary UK limited partnership
• Consider an adviser-cleared private fund limited partnership
• Form a Scottish limited partnership
• Compare an LLP with a private limited company where the true alternative is a company or other non-LP structure.
• Request the Compare LLPs, ordinary LPs and Scottish LPs structure assessment only where the partnership form remains unresolved.

No one partnership form is universally superior. The correct destination is the structure that corresponds to the intended management, authority, liability, legal personality, jurisdiction and continuing responsibilities—or the professional assessment needed to resolve those facts.