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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 Great Britain bring together a number of benefits: -
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 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 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.