Limited Liability Partnerships are generally referred to as LLPs in their abbreviated form. The LLP structure is ideal for accountants, attorneys, architects, contractors, surveyors and other knowledge fields where a partnership is preferred to a limited company.
- LLPs protect the member's personal assets against the business's liabilities. LLPs are independent legal bodies for members.
- LLPs are Flexible. The partnership process and benefit-sharing are decided by written agreement among the participants. This can allow greater flexibility in company management.
- An LLP is considered a legal body. It can purchase, rent, own land, hire workers, enter into contracts and if necessary be held accountable.
- Company ownership. Two companies may be listed as LLP members by LLP.
- Designate participants and others not named. The LLP can be run with various membership levels.
As in all company models, there are both drawbacks and benefits. In certain cases, the following are the disadvantage:
- The principal downside of an LLP is public disclosure. Financial accounts must be filed for public record with Companies House. Members' profits will be declared by the accounts which they do not want to make public.
- Revenue is personal revenue and is charged accordingly. Registration as a corporation may have tax benefits but this will depend on your personal circumstances.
- The benefit can not be maintained in the same manner as a limited-share business. This means that all earned profit is essentially allocated to a future tax year without any opportunity to keep over earnings.