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Why Non-UK Residents Form an LLP? Non-Resident LLP Formation in United Kingdom

How to use a limited liability partnership? When to use an LLP in business?

Why non-UK residents form an LLP? Benefits using of an LLP - a limited liability partnership is an alternative way of doing business, a halfway house between a company formation and a limited partnership, it offers a number of benefits. If you're curious and want to know more, contact Coddan LLP startup agent for help. Aimed at global partnerships between teams of lawyers and the like, it has spread to a number of different fields, including property investors, investment funds, not-for-profits companies, overseas clients and dormant partners in all kinds of businesses.

Non-resident LLP formation in United Kingdom: as another possible way to use an LLP is to have the UK incorporated LLP with offshore members, who are not associated to your main business at all as a part of your current services providers. There are many ways to use an LLP in your business, all you need is to think how and in which particular business needs you can use an LLP for your current business. To clarify your enquiry, or discuss how the establishment of an LLP in Great Britain might help with your situation, please contact us, and we will explain the pros and cons of using an LLP for your current or future needs.

An LLP limits the liability of certain partners to their capital investment, so it carries similar protection to a limited company creation with the tax advantages of a partnership and, therefore, near sole trader status. Using an LLP can help minimise National Insurance Contributions and is an exceptionally tax efficient structure when organised correctly. Overseas clients can find this particularly beneficial as they can conduct all their various business through the LLP incorporation and then withdraw their profits in an efficient way.

Just two LLP members are required to be held liable for filing LLP accounts and other secretarial duties. These designated members then remain constant, but aside from them others are free to come and go, if you want, we can setting-up an LLP with nominee members. This encourages short-term allegiances on one-off projects and has helped property developers come together to pool resources. An LLP can also borrow against its assets, so a construction company can secure a loan against the development site. All the liability lies with the LLP, rather than the individual members, which is a safety net for all involved. This theory also encourages dormant partners to invest money in businesses, as it limits their risk to the capital they invest.

So there are a number of advantages to an LLP creation. And if you need help or advice, contact Coddan Ltd for more information and helpful advice.

Are you looking to start up a business and use an LLP?
Do you need more information on how to use an LLP in business?

Benefits Using of an LLP in Business

LLP creation for non-UK customers: if you're a non-resident and want to do business in the UK, an LLP can be an exceptionally tax efficient structure and offers a number of advantages over a traditional limited company. If you want to know more, Coddan Ltd can help. We have helped many overseas clients by creating LLPs and advising on how to exploit them. If you want to do business, own property or even borrow money against assets in the UK then withdraw profits in the most tax-efficient way possible, an LLP, or limited liability partnership, is a business structure you need to consider. If you need an assistance with LLP creation, you can also speak to our business advisors between 9.30am-6.00pm Monday to Friday by telephoning + (0) 207.935.5171 or + (0) 330.808.0089 (national rates).

Benefits to use of UK limited liability partnership in business

Benefits to Use of UK LLP in Business

As far as you know, a limited liability partnership is an alternative to a private company and provides much more flexibility as well as limited liability, as the name implies, for certain partners. In truth there are a number of advantages with an LLP, not least is that the LLP is considered a full legal body and is liable for the debts it runs up, as with a limited company, rather than the individual members. Also certain members of the partnership are protected from massive claims arising from the actions of other members of the LLP, which is especially useful in global partnerships.

The limited liability partnership Act came into force in April 2001, and it was aimed at worldwide partnerships like legal practices, or business service providers, where the members in one nation simply could not have full knowledge of the actions of their partners in another country. It has been adopted by a number of other industries en masse, though, as they have seen the benefits of LLP creation and wish to take advantage.

Financial services companies have jumped on the LLP bandwagon, especially with fund management ventures. The LLP's flexibility allows for close or loose management, and accounts for the differing earnings and bonus schemes that can skew various partners' earnings radically.

UK LLP registration has also proved popular with commercial property developers as partnerships can come together on a loose basis to pool resources for a particular investment. With an LLP individual members are free to come and go without the need to restructure the business officially, which allows for casual allegiances to form for short periods without generating huge amounts of paperwork.

An LLP can borrow against its assets a construction partnership could even use a development property in progress to secure a loan without the members being individually liable. As long as two designated members remain constant, the LLP can change its membership, as it needs. The burden of liability for filing accounts and for proper practice lies with the designated members, too, so other members of the LLP are relatively protected. There is not even a legal requirement for an LLP agreement, although Coddan Ltd company formations agent still recommends a clear written contract to ensure that a dispute later on can be dealt with effectively.

Non-profit companies, and non-for profit organisations like museums and galleries have found the advantages of an LLP, too; when they want to establish the joint venture with an outside body or private individual. Any profits from this arrangement go to the members who then pay tax, effectively, as sole traders.

There are also tax advantages to an LLP for overseas clients on occasion, as they can own investments, interests and land through an LLP and use a legal tax avoidance scheme to take the profits in the most tax efficient way. The LLP also helps some overseas clients by providing a legal structure in the United Kingdom, which has the good reputation worldwide.

Using of a UK Limited Liability Partnership in Real Business

Using of UK LLP in Business

Of course there are many other reasons to enter into an LLP. One popular reason is for dormant partners who wish to limit their exposure to the actions of the active partners. Someone who has no input into the day-to-day running of the business cannot know everything that is happening, but under other structures may be held liable to the same extent for malpractice or legal claims. With an LLP, the dormant partner protected and the only loss he can sustain is his capital investment.

Other reasons include taking on a partner who represents a major risk, but could potentially bring major rewards. UK LLPs are giving on of the best opportunities to start a family business, when all members of the family can join the LLP partnership with the equal rights and responsibilities, or whose business management duties or legal responsibilities can be shared in between designated or ordinary members.

If you are running a save planet business, like the Green Peace, and you need to find funds to protect your activists, you may establish a new side project for this matter as an LLP, and ask the public to donate to this specific project.

The registration of an LLP can be the good choice for the already existent businesses, as well. For an example, by running a successful business, you might receive a good opportunity to start a side project from you manager, or from the outside investor; and all you need to do is only invest money into the new project.

You can accept such chance by offering to set-up a limited liability partnership for such project, and technically, you will be responsible for your investment only. You line manager can be appointed as the designated member, you can appoint yourself as the designated member as well, if you want. On the other hand, you may create a dormant company in the UK, or create an offshore company and appoint it as the second designated member, it can be the good solution to minimise your own risks.

In other words, those days, when the limited liability partnerships were association with only professional bodies, such as accountants, solicitors, etc., were gone forever. In our days, many wide ranges of the regular businesses are choosing an LLP as the best structure to incorporate.

Legally, LLPs are regulated by a hybrid system of law that combines company and LLP law, which makes the creation of an LLP especially attractive, as if the LLP is forced to wind up for any reason then the liability of the members is limited to their capital investment.

The LLP set-up and post LLP incorporation costs are not insignificant and for that reason some organisations may be better served with a limited company rather than an LLP.

A limited company formation serves many of the same functions for a similar cost, but for a large network the LLP creation may simply be the most effective way to structure the business. Whatever the case, or if you need the guidance in what particular cases, you should to set-up as an LLP; Coddan Ltd is waiting to answer your call.

LLP vs limited company: advantages of setting up an LLP

LLP Vs Limited Company

Are you looking to find answers to such questions are: LLP vs limited business, or limited company vs limited liability partnership, & advantages of setting up an LLP online? A limited liability partnership (LLP) is a separate legal business structure that, at one and the same time, grants the benefits of limited liability while allowing the partnership's members to enjoy the flexibility of structuring the business as a partnership in the traditional sense. LLPs are intended for those businesses that carry on a profession or trade. In the past, they were particularly appealing to the larger of the professional partnerships, in our days, two or more business people who are currently running their own, but similar businesses as self employed, can cooperate and establish an LLP for their commercial activities.

In law LLPs are regarded as corporate bodies that are subject to company law, but for tax purposes are usually considered as partnerships. One of the key features of LLPs in the UK is that they are fully transparent entities for tax purposes, even though they have a separate legal status. The LLP pays no tax itself. The tax authorities in the UK will instead look to each of the partners to assess their individual UK tax liability.

So while members provide the working capital and take a share of any of the profits, those that are individuals are liable to pay income tax under the self assessment rules, while as far as National Insurance is concerned they will generally pay self-employed Class 2 and Class 4 contributions. Those members that are companies are liable to pay corporation tax on any share of the profits they take.

If the LLP's members are not resident in the UK and the income of the LLP is derived from a non-UK source, then neither the LLP or its members will be subject to UK taxation. So LLPs in the UK bring together a number of benefits: -

  • Limited liability protection
  • Corporate status with unlimited capacity
  • Along with the ability of members to not only operate but also be taxed as a partnership

This means that the LLP's separate legal status makes it possible to act in a similar way to a limited company - holding assets and contracting in its own name.

Consequently an LLP in the UK is characterised by being a very flexible body for trade in the international market place which, if structured correctly, can escape being subject to taxation in the UK. Under the Limited Liability Partnerships Act (2000) LLPs in the UK are not only commonly used by firms of a professional nature but incrementally as tax efficient vehicles for international trading by non-UK concerns. Put simply they combine the benefits of the "body corporate" - that is corporate status, having a legal attribute that is distanced from the members that constitute it - with the protection afforded by limited liability for the members.

On top of this the partnership's members - or partners - instead of the partnership itself are the ones who are subject to the taxation on their taxable profits. The general tax rules allowing LLPs to be taxed as partnerships, and preventing tax loss, including through investment and property investment LLPs, came into force in 2001.

Coddan came together in 1993 when a group of professionals whose experience and skills enabled them to provide a service creating and incorporating companies and partnerships to UK and international clients, including in the areas of taxation, accounting, auditing, management consulting, trust administration, and offshore services. Coddan's mission is to help international clients - both corporate and individual - to achieve their financial and business goals worldwide by offering the very best quality consultancy on international tax planning and other business related services.

Coddan's in-house team of senior consultants is formed of people who have years of experience and hold widely recognised and respected qualifications, to ensure they have the required status, integrity, competence and ability to provide the highest quality service. One of the leading reasons why clients choose to work with Coddan when creating a limited liability partnership is that the expert team has a track record of determining the best business structures for tax purposes.

If you don't require advice or guidance on how to create an LLP, you can simply place an order online with e-mail notifications of filing status changes, automatic e-mail confirmation, and status updates.

The legal framework for LLPs was set down in the Limited Liability Partnership Act 2000, which brought in tax legislation that made sure LLPs in general would be taxed as partnerships rather than as corporate bodies. During the passage of the Act, and in response to concerns about tax loss potential, a review was announced into the taxation of LLPs.

You've decided the flexibility and tax implications of a limited liability partnership are right for your enterprise. You want a UK business registered address. How will you go about getting your partnership registered with Companies House? Applying using the paper Companies House forms can be slow and expensive, and there's always the possibility something will go wrong, creating even more delay.

Coddan Ltd are here to help. Whether you're based in the UK or abroad, we have the expertise and experience to handle your LLP creation with ease and speed.

Whether you choose a tailored solution or a ready-made LLP, we'll make sure your LLP is up and running in no time, leaving you free to concentrate on building your enterprise. To set up an LLP with Coddan simply talk to an adviser.