Your shopping cart is empty
Benefits of setting-up as a limited liability partnership with Coddan: when many entrepreneurs first consider a company formation, they are not completely aware of their options. In the UK, there is not a single company structure. In fact, there are a number of different options for a corporate body. The four main types of structure in the UK are those of limited company (LTD), public limited company (PLC), limited liability partnership (LLP) and limited liability company (LLC).
For those entrepreneurs who plan to trade on their own in a small capacity, there is also the option of setting up as a sole trader. Each type of company has its own advantages and disadvantages and has been broadly created to serve a particular type of company. Similarly, there are LLP characteristics that make that structure suitable for centre circumstances.
LLP benefits and responsibilities: the LLP will be registered at Companies House and will receive a certificate of registration much like a limited company. The LLP will also have to submit an annual return and provide annual accounts, just like a limited company does. One of the main LLP advantages is that its partners can enjoy all of the protection of limited liability but the organisation still has a traditional partnership structure. Each partner will only be liable for the amount of their investment in the LLP and the value of the equity in the business.
Advantages of a limited liability partnership: differences between an LLP and limited company: one fundamental difference between a limited company and an LLP is that the LLP does not issue shares. There are also LLP benefits around the ongoing regulatory requirements of the organisation. For example, the LLP has no need to conduct and annual general meeting (AGM). Another interesting factor of the LLP is the nature of the partners, known as members. These members can certainly be individuals but they can also be limited companies in themselves. This means that limited companies can partner with other limited companies and individuals to setting up an LLP to address specific projects. These LLP characteristics can make it an ideal vehicle for businesses to work together on projects within a legal framework.
The Limited Liability Partnership Act came into force in 2001 and was aimed at global partnerships, including legal practices that wanted to form international enterprises without undue risk. The theory is that a lawyer on one side of the world cannot be fully responsible for a partner's actions on the other, in a different jurisdiction. So the limited liability partnership becomes liable for any claims or debts in such a case, and the individual partner's liability is limited to their capital investment. Just two people are required to be designated members, and the rest of the LLP's structure can remain flexible with members coming and going. This flexibility appeals to many types of business, especially entrepreneurs that want to work together on a short-term basis for specific projects.
Registering an LLP in UK offers a wealth of opportunity, given that you will benefit from paying no tax on your profits if you are non a UK domiciled individual, and using an LLP for your business outside of the UK. The paperwork and LLP incorporation process would be an administrative nightmare if you were to attempt to set up an LLP by yourself, but utilising the services of highly regarded incorporation firm Coddan Ltd reduces the whole process for you to one single phone call. Our highly experienced team have been assisting in limited liability partnership start-up in UK for many years. We can perform the entire >LLP start-up procedure for you, including the provision of a nominee LLP member, nominee secretarial support and EU business bank account, in an entirely stress-free manner.
What is a limited liability partnership? Limited liability partnerships were created by the Limited Liability Partnerships Act 2000, and are known as "LLPs". Two or more individuals, corporations, partnerships, trusts, or other entities can join together to engage in business as an LLP.
The owners of an LLP are called "partners". Partners essentially own the LLP much in the same way as partners own a general partnership and shareholders own a corporation. When an LLP engages in business activities, it is the LLP itself which actually owns and operates the business from a legal sense. Limited personal liability of the partners of an LLP means that in most situations the debts and obligations of the business engaged in by the LLP are not the personal responsibility of the partners - the debts and obligations of the business can only be paid from the income and assets of the LLP.
Of course, if a business operated by an LLP has financial difficulties, each partner of the LLP could lose the amount of his or her investment in the LLP, as well as the equity built up in the business.
Beyond this, however, no partner risks the loss of his or her other assets and income. As with a company formation, the LLP will have a registered office, recorded at Companies House. Enforcement will be taken against the LLP as a legal entity in its own right. Members or designated members of the partnership may also be the subject of enforcement as members of a body corporate under s.37(2) HSWA, if their conduct comes within the terms of s.37(1). Care should be taken to determine individual roles and responsibilities, to ensure that any action is being taken against the most appropriate person.
Choosing the entity that best suits your business and personal needs is an important decision and should not be taken lightly. Legal and tax advantages as well as disadvantages exist for each entity. It is strongly suggested that new business owners consult with both a tax accountant and an attorney to aid in making a proper decisions.
Operation of a business as an LLP may not be appropriate for all situations. Careful consideration should always be given to the choice of business organization. The desired financial and managerial relationships among the investors, the potential liabilities of the business, and consequences of various tax treatments are factors which must be considered. We recommend reviewing this site in its entirety, so that you are knowledgeable of the UK jurisdiction and the powers granted to UK LLPs.
From 6th April 2001 it will be possible to register UK limited liability partnerships (LLPs) at Companies House. This new business entity, which will combine limited liability, corporate personality and the advantages of partnership taxation, may prove attractive not only to the professions but also to many other businesses. Limited liability partnership is a body corporate (with legal personality separate from that of its members) which is formed by being incorporated under the Limited Liability Partnerships Act 2000; and a limited liability partnerships has unlimited capacity.
The members of a limited liability partnerships have such liability to contribute to its assets in the event of its being wound up as is provided for by virtue of the Limited Liability Partnerships Act.
For a limited liability partnerships to be incorporated: two or more persons associated for carrying on a lawful business with a view to profit must have subscribed their names to an incorporation document, there must have been delivered to the registrar either the incorporation document or a copy authenticated in a manner approved by him, and there must have been so delivered a statement in a form approved by the registrar, made by either a solicitor engaged in the starting-up of the limited liability partnership or anyone who subscribed his name to the incorporation document.
The LLP start-up document must be in a form approved by the registrar (or as near to such a form as circumstances allow), state the name of the limited liability partnerships, state whether the registered office of the limited liability partnerships is to be situated in England and Wales, in Wales or in Scotland, state the address of that registered office address, state the name and address of each of the LLP partners who are to be members of the limited liability partnerships on incorporation, and either specify which of those persons are to be designated members or state that every person who from time to time is a member of the limited liability partnerships is a designated member.
The profits of the business of an LLP will be taxed as if the business were carried on by partners in partnership, rather than by a body corporate. This ensures that the commercial choice between using an LLP or a partnership is a tax neutral one. The taxation clauses in the Act are expressed in broad terms so that the existing rules for partnerships and partners will, in general, simply apply to LLPs, and members of UK LLPs, which are carrying on businesses, as if these were partnerships and partners respectively.
The transfer of an existing business to an LLP will only be treated for tax purposes as giving rise to a cessation of the business of the partnership which is making the transfer if in otherwise identical circumstances a transfer between one partnership and another would do so.
The final draft of The Limited Liability Partnerships Regulations 2001 have now been laid before Parliament and published by the Stationery Office. In their December 2000 Tax Bulletin (issue 50) the Inland Revenue set out their views on how members of an LLP which carries on a trade or profession will be taxed. This contains much useful information and can be accessed at (www.inlandrevenue.gov.uk/bulletins/tb50.htm). However, it specifically states that it "does not cover the detailed tax treatment of investment businesses for which the LLP structure was not originally intended". Therefore the Revenue appear to be signalling that the tax treatment for investment LLPs will not be as favourable.
An English LLP registered at Companies House will receive a certificate of registration, like a limited company. It will be a corporate body and will be required to file certain information at Companies House. However, it will not have share capital and will be organised and taxed like a partnership. An agreement, which will not be publicly filed, will be a practical necessity.
In addition, all business letters and order forms must show the following: limited liability; body corporate; taxed as a partnership; organisational flexibility of a partnership; partnership agreement (if any) confidential to members; accounts preparation and filing requirements broadly as for a company; ability to create floating charges. The ability to create a corporate body with limited liability which at the same time will be taxed (and largely organised) as if it were a partnership is'a strong combination for the right circumstances.
Those setting up a new business may wish to consider an LLP as an alternative. Many existing partnerships may also wish to consider whether the LLP will be suitable for them. There will be stamp duty relief on the instrument transferring property from an existing partnership to a newly incorporated LLP if relevant conditions are met. Interestingly, there is no minimum amount for contribution by members in a winding up of an LLP. However, there are detailed provisions designed to prevent members siphoning off funds in the event of insolvency. Parts of the Insolvency Act 1986 will apply.
Limited Liability Partnership Membership
On the incorporation of a limited liability partnership its members are the persons who subscribed their names to the incorporation document (other than any who have died or been dissolved). Any other person may become a member of a Limited Liability Partnership by and in accordance with an LLP partnership agreement with the existing members. A person may cease to be a member of a limited liability partnership (as well as by death or LLP dissolution) in accordance with an agreement with the other members or, in the absence of agreement with the other members as to cessation of membership, by giving reasonable notice to the other members.
A member of a limited liability partnership shall not be regarded for any purpose as employed by the limited liability partnership unless, if he and the other members were partners in a partnership, he would be regarded for that purpose as employed by the partnership.
LLP Members as Agents
Every member of an LLP is the agent of the limited liability partnership. But a limited liability partnership is not bound by anything done by a member in dealing with a person if the member in fact has no authority to act for the limited liability partnership by doing that thing, and the person knows that he has no authority or does not know or believe him to be a member of the UK limited liability partnership.
Where a person has ceased to be a member of a limited liability partnership , the former member is to be regarded (in relation to any person dealing with the limited liability partnership) as still being a member of the limited liability partnership unless the person has notice that the former member has ceased to be a member of the LLP, or notice that the former member has ceased to be a member of the limited liability partnership has been delivered to the registrar.
Where a member of a limited liability partnership is liable to any person (other than another member of the limited liability partnership ) as a result of a wrongful act or omission of his in the course of the business of the limited liability partnership or with its authority, the limited liability partnership is liable to the same extent as the member.
If the incorporation document specifies who are to be designated members any member may become a designated member by and in accordance with an LLP agreement with the other members, and a member may cease to be a designated member in accordance with an agreement with the other members. But if there would otherwise be no designated members, or only one, every member is a designated member.
If the incorporation document states that every person who from time to time is a member of the limited liability partnership is a designated member, every member is a designated member. A limited liability partnership may at any time deliver to the registrar: notice that specified members are to be designated members, or notice that every person who from time to time is a member of the limited liability partnership is a designated member. A notice shall be in a form approved by the registrar, and shall be signed by a designated member of the UK limited liability partnership or authenticated in a manner approved by the registrar. A person ceases to be a designated member if he ceases to be a member.
Choosing an Limited Liability Partnership Status
Choosing an Limited liability partnerships (LLPs) can provide an ideal structure for numerous businesses - not simply professional practices as is a common misconception. The only activities that cannot adopt LLP status are those that are unlawful, not intended to be profitable and which do not constitute the carrying on of a trade, profession or occupation. Therefore, if you are contemplating setting up in business or reconsidering the structure of an existing business, an LLP could be an option worth investigating. For professional service partnerships, conversion to LLPs may offer an attractive prospect at the moment as the number of negligence claims against professional firms are increasing, and as a result professional indemnity (PI) cover is becoming more expensive.
Unlike a standard partnership, an LLP is a corporate body with the ability to contract in its own right. The partners - known as members - are not put at risk by the negligent acts of their fellow members and their liability is limited to the amount they agree to contribute upon a winding up. For most tax purposes, however, the corporate status is ignored and members can essentially enjoy the same income tax, national insurance and capital gains tax treatment as partners in a general partnership.
Such advantages do not come without effort - there are starting-up and filing requirements that need to be adhered to. However, for many businesses LLPs offer an excellent halfway house between an unincorporated business and a company. LLPs are, technically, corporate bodies. This means they offer several commercial advantages over ordinary partnerships. Their corporate status gives them added credibility among customers and suppliers and they can find it easier to borrow because they can give the bank a floating charge over their assets - something ordinary partnerships cannot do.
When limited liability is factored in, but with the flexibility to operate day to day like an ordinary partnership (no Annual General Meetings and the related paraphernalia associated with limited companies), LLPs are suddenly a pretty serious proposition for the smaller business. Another consideration is that LLPs, like limited companies, have to make their annual accounts public by filing them at Companies House. For some businesses, this is actually an advantage - although for others it's a "showstopper".
If an LLP creates a mortgage or charge over its property this will require registration at Companies House within 21 days of its creation if it covers certain types of property such as land or buildings or book debts or if it is a floating charge. The original mortgage or charge document must be submitted to Companies House along with the relevant form. If a charge is not registered in time it will be void against the liquidator or administrator of the LLP or against any of its creditors. Late registration is only permitted with the sanction of a court order.
An LLP is required to keep a register of charges at its registered office and to enter in this details of all charges created (this applies even to charges that are not registrable at Companies House). It must also keep available for inspection at registered address, or at SAIL address by any member or creditor of the LLP copies of any charge instruments relative to charges it has created that are incorporated at Companies House. If a registered charge is satisfied, may be submitted to the registrar in order that the register of charges may be updated. Special provisions apply to mortgages and charges created by Scottish LLPs.
Partnership Agreement & Financial Issues
All the financial issues below should be taken into consideration in a partnership agreement.
LLP Capital Investment
The agreement should state how much financial input each partner is have. Capital investment from each partner is how the business will finance itself and purchase the assets needed to run the business.
LLP Income and Share of Profits
You will need to consider how much, if any, each partner will take from the business as a salary. This will be before profits are distributed and can be used to reflect the different roles and work input of each partner. In addition, you may wish to award partners' interest on their capital contributions. This can be paid before profits are distributed to reflect any differences in capital investment. Unless expressly agreed, the Partnership Act states that each partner will share profits equally.
If you want to share profits in different ratios, for example, to reflect seniority, then this will have to be expressly stated. You will also need to address the issue of how any losses will be shared.
A potential source of disagreement between partners is the amount of money each is entitled to draw from the business. Some may wish to store a higher percentage of profits in the business to maintain a healthy balance, whilst other partners may want to withdraw their share of the profits immediately. It is important, therefore, to agree on a limit on drawings, for example, a set monthly amount.
Shares in Asset Value Changes
In the situation where a fixed asset of the firm, such as a warehouse, is sold at a profit, how is this profit to be shared? Under the Partnership Act, this will be in equal proportions unless stated otherwise. It may be important, therefore, to expressly agree on what is to be done in this situation if this profit is not to be shared equally.
Ownership of Business Assets
The business may acquire assets during its life, partners may allow the business to use assets that they own or a partner may use the value of one of their own assets to represent their capital investment in the business. It is; therefore, important to stipulate which are the partnership's assets and which belong to an individual partner. Disagreement over the ownership of assets may occur when dissolving the partnership.
If the partnership is likely to prove quite complicated or there are substantial amounts of money or assets involved, you should seek advice from a solicitor. The above information, however, will help you be informed about the most important issues and enable you to consider relevant matters with your other partners.
Partnership Agreement Operational Issues
All the operational issues below should be taken into consideration in a Partnership Agreement.
Degree of Commitment
It is important to consider how much work each partner is to do in the business. For example, a 'sleeping partner' whose involvement is purely financial, will not want to be required to take part in the daily running of the business. In addition, some partners may want to work part time whilst others are to work full time. The Partnership Act will imply that each partner has the right to take part in the daily management of the business unless stated to the contrary. An agreement should set out, therefore, the degree of commitment of each partner. For a full time working partner this may be expressed as 'devoting his/her whole time and attention to the business.
Sickness, Absence and Holidays
When considering the degree of commitment that the partners are to have, you should address the issue of absence from the business. It is important to consider what will happen, for example, when a partner needs maternity leave or is suffering from long-term incapacity. You will have to qualify the duty of any full time partner to devote all his/her time and attention to the business with whatever is decided on about time off for holidays, sickness or other absenteeism.
It is important to state the different functions each partner is to have within the firm and the extent of their authority. For example, one partner may be in charge of sales whilst another is in charge of purchasing. The agreement might state that a particular partner only has a set amount of authority, for example, to enter into contracts less than £10,000.00 in value, or alternatively, that a partner has authority to do whatever they feel is in the best interests of the business within their area. Any partner ignoring a restriction or the scope of their role may be liable for breach of contract.
LLP & Decision-Making
Unless otherwise agreed, all partnership decisions will be made on a majority basis by one partner one vote. However, if it is a decision on changing the nature of the business or the introduction of a new partner, then every partner must agree. It may well be, therefore, that this is not what partners in a particular business want. For example, it may be a good idea to state that certain decisions can be made by one partner alone, such as buying stock, other decisions require a majority vote, such as employing staff, whilst others require the consent of all the partners, such as buying new premises.
If the partnership is likely to prove quite complicated or there are substantial amounts of money or assets involved, you should seek advice from a solicitor. The above information, however, will help you be informed about the most important issues and enable you to consider relevant matters with your other partners.
LLP Partnership Agreement Termination Issues
All the term and termination issues below should be taken into consideration in a partnership agreement.
The Partnership Act provides that unless agreed to the contrary, any partner can terminate the partnership at any time by giving notice to the others. This notice will take effect immediately and does not have to be in writing. This means that a partnership can seem very insecure and uncertain if a particular duration for it is not agreed on.
There are a number of ways of giving a partnership more security. Firstly, you can put a clause in the agreement stating that a partner must give a set period of notice before ending the partnership. A period of 6 months or more, for example, would allow the partnership time to find a new partner. Alternatively, you can agree that the partnership is to last for a fixed term during which it cannot be ended by one of the partners. Once the period has ended it could then continue on the same terms, but could be terminated by a partner giving a period of notice.
Lastly, you could provide that the partnership is to continue for as long as there are at least two partners in the firm. This would allow partners to leave without requiring the business to end. You should also consider the possibility of a partner dying or becoming bankrupt. The Partnership Act says that if this happens then the partnership will end. It is worthwhile, therefore, to consider a clause that the partnership will continue in this situation, as long as the other partners can pay for the deceased's or bankrupt's share of the business.
In certain circumstances, the partners in a business may feel it necessary to expel a particular partner. This may be because he/she has broken the partnership agreement, for example, by not devoting enough time to the business. If this issue is not addressed in the partnership agreement, then the law says that the only way to expel a partner is to dissolve the business. An agreement should, therefore, set out in what circumstances a partner can be expelled, how the decision to expel is to be made (majority vote or all remaining partners in favour) and state that the partnership is to continue without him/her. You will also have to deal with payment of the expelled partners share of the business.
Paying For an Outgoing Partners Share
When a partner leaves a business whether through death, expulsion or retirement and that business is to continue, the outgoing partner must receive payment from the others for his/her share. The terms of this payment should, therefore, be agreed in advance.
It is important to consider: whether the other partners have to buy the other partners' share or whether it is an option to buy. When the partner is to receive payment, for example, immediately, after a set period of time or by instalments. How the share of the business is to be valued, for example, by a named professional or by an agreed formula by the partners.
An outgoing partner will be free to set up a competing business or to work for a competitor unless a restraint of trade clause is inserted into an agreement.
In order to be legal, such a clause must: seek to protect a legitimate interest. This is normally the firm's business links and confidential information. Be reasonable in terms of duration and geographical area. If the clause is unnecessarily restrictive and would deprive an outgoing partner of a living for a lengthy period, then it will not be enforceable. The area must not be very wide, for example, it should be limited to the area in which the firm actually did business and not prevent a former partner from working elsewhere.
It must also be limited to the kind of business that the partnership operated in, for example, it cannot prevent a former partner from finding employment in a different trade. Anything longer than 12 months may also prove quite difficult to enforce. If the partnership is likely to prove quite complicated or there are substantial amounts of money or assets involved, you should seek advice from a solicitor. The above information, however, will help you be informed about the most important issues and enable you to consider relevant matters with your other partners.
Number of Partners
A partnership, whether limited or not, may not normally consist of more than 20 persons. However, under Companies Act there are a number of exceptions to this rule, including: a partnership carrying on practice as solicitors and consisting of persons each of whom is a solicitor. A partnership carrying on practice as accountants where the partnership is eligible for appointment as a company auditor. A partnership carrying on business as members of a recognised stock exchange and consisting of persons each of whom is a member of that exchange.
A partnership carrying on business as surveyors, auctioneers, valuers, estate agents, land agents, or estate managers and consisting of persons of whom at least three-quarters are members of the Royal Institute of Chartered Surveyors or the Incorporated Society of Valuers and Auctioneers and of whom not more than one-quarter are limited partners. Partnership carrying on business as insurance brokers and consisting of persons each of whom is a registered insurance broker or an enrolled body corporate. For the meaning of "registered insurance broker" and "enrolled body corporate" see Section 29(1) of the Insurance Brokers (Registration) Act 1977.
Partners are considered as self-employed for tax purposes. Partnerships do not pay corporation tax. Because of this, you will be responsible for your own tax and National Insurance and will therefore be required to register with the Inland Revenue. You are required to register with the Inland Revenue as self-employed within 3 months of starting a new business. Failure to do so may make you liable to pay £100.00. If you do not register and are not paying tax, you will breaking the law and could be liable to further penalties.
Registration is achieved by completing and sending to the IR form CWF1. This form registers you for paying flat rate Class 2 National Insurance contributions. The weekly flat rate is £2.40 p.w. You should fill in the Class 2 contributions Direct Debit application form. In the April after your business starts (financial year is from 6th April to the following 5th April) the Inland Revenue will send you a self-assessment tax return to fill in.
This will be used to assess any profit -related Class 4 NI contributions that you may need to pay. After your first year in business, the IR will ask you to make "payments on account" - to pay most of your income tax and some of your Class 4 NI contributions in advance. The amount requested is based on the prior year's earnings with payments due on 31st January and 31st July. If your profits are down you can request to reduce these payments.
The Business Names Act 1985 requires all businesses trading under names other than those of their owners to display their owners' names and an address at which documents can be served. This information must be displayed both at business premises and on business stationery. It must also be supplied in writing at the request of any person with whom you are doing business. Where the partnership consists of more than 20 persons, certain exceptions apply to the business stationery requirements.
As a partnership, you must keep the following records: the purchase ledger; the sales ledger; the cash book; the creditors & debtors control ledger. Partnerships will need to prepare the following accounts: the balance sheet; the profit and loss account. Profits that are shared out in accordance to the partnership agreement must be shown in the profit and loss account. The partnership accounts must be prepared within a period of 10 months after the end of the financial year. The accounts may cover any period up to 18 months which may be specified in the partnership agreement.
If a period is not specified in the agreement, the partnership accounts must be drawn up for each 12-month period ending on 31st March in each year. After your first year in business, the IR will ask you to make "payments on account" - to pay most of your income tax and some of your Class 4 NI contributions in advance. The amount requested is based on the prior year's earnings with payments due on 31st January and 31st July. If your profits are down you can request to reduce these payments.
The accounting and audit requirements for limited liability partnerships will be similar to those applied to companies. They will include financial disclosure for third parties dealing with the LLP and disclosure of earnings of the highest paid member. Although all limited liability partnerships (LLPs) have to submit some form of accounts to Companies House, these accounts don't have to be audited for financial years starting before 6 April 2008 or prior to 1 October 2008 for LLPs if you:
For financial years starting on or after 6 April 2008, to qualify for total audit exemption, an LLP must:
Small and medium-sized LLPs can take advantage of the higher thresholds for accounting periods starting on or after 1 October 2008. In these cases you can submit audited accounts if you wish, but it is not compulsory. Bear in mind there can be drawbacks. Banks, credit managers and your customers and suppliers rely on information from Companies House to assess creditworthiness and will be reassured by an independent audit. If you decide to submit audited accounts, you must appoint an auditor.
Even if a small LLP meets the criteria, it must still have its accounts audited if any of the following ask for an audit:
Recent changes to the rules have allowed some small financial services businesses and some small businesses, such as home-finance providers, that comply with Sharia law to qualify for an audit exemption. However, businesses taking advantage of the audit exemption should be aware that shareholders who own 10 per cent or more of the company still have the right to ask for an audit.
Limited Liability Partnership Insolvency & Winding Up
The major corporate insolvency and winding up procedures contained in the Insolvency Act 1986 will apply to limited liability partnerships. This will include a provision granting the court discretion to order repayment of any withdrawals made by a member of an LLP within the 2 years prior to winding up. This will only in the event that the member knew or ought to have concluded that after such a withdrawal there was no reasonable prospect that the LLP would avoid going into insolvent liquidation. The limited liability partnership and its members may also be subject to statutory investigation and to penalties for wrongful and fraudulent trading.
United Kingdom Limited Liability Partnership Taxation
LLPs will be taxed as though they were partnerships. Provisions in the LLP Act ensure that the transfer of assets from an existing partnership to a limited liability partnership will be tax neutral. Limited liability partnerships that do not carry on business as a trade or profession such as an investment company will be subject to corporation tax.
Limited Liability Partnership Annual Return
Every limited liability partnership must deliver an annual return to Companies House within 28 days of its made-up date. A limited liability partnership's designated members are responsible for ensuring that the annual return: is delivered to Companies House within 28 days after the anniversary of incorporation or the anniversary of the made-up date of the last annual return; and gives a true picture of the membership of the limited liability partnership at the made-up date.
NB: It is a criminal offence not to deliver the limited liability partnership's annual return within 28 days of the made-up date, for which designated members may be prosecuted.
Limited Liability Partnership Accounts & Accounting Preference Dates
Every limited liability partnership must prepare annual accounts that report on the financial performance and position of the limited liability partnership during the year. The period reported on in the accounts is called the financial year. This starts on the day after the previous financial year ended or, in the case of a new limited liability partnership, on the day of incorporation. Another term for a "financial year" is an "accounting reference period" (ARD).
For all new limited liability partnerships, the first accounting reference period is automatically set as the first anniversary of the last day in the month in which the limited liability partnership was incorporated. For example, if the limited liability partnership was incorporated on 10 June 2001 its ARD would be set at 30 June, and the first accounts would cover a period from 10 June 2001 to 30 June 2002 - or up to seven days either side of that date.