How to Incorporate a Limited Liability Partnership (LLP)

A Limited Liability Partnership sits in an interesting middle ground. It's more structured than a traditional partnership, but less rigid than a limited company. For the right kind of business, that balance is exactly what's needed.

This guide covers what an LLP is, who it tends to suit, what you need to register one, and how the process works in practice.

Key Takeaways

• An LLP is a separate legal entity from its members. It can own assets, sign contracts, and take on liabilities in its own name.
• Members benefit from limited liability, meaning their personal assets are generally protected if the business runs into financial difficulty.
• You need at least two members to form an LLP. Members can be individuals or corporate bodies.
• Every LLP must have a registered office address in the UK, which appears on the public Companies House register.
• LLPs have ongoing filing obligations, including annual accounts and a confirmation statement each year.
• Members are typically taxed as self-employed individuals, reporting their share of profits through Self Assessment rather than through Corporation Tax.
• An LLP agreement isn't legally required, but not having one is a risk. It sets out how the partnership runs and how profits and responsibilities are divided.
• Companies MadeSimple can register your LLP online, with most applications processed within one working day, subject to Companies House workload.

What Is a Limited Liability Partnership?

An LLP is a legal business structure created under the Limited Liability Partnerships Act 2000. In simple terms, it takes the day-to-day flexibility of a traditional partnership and adds the legal protection that normally comes with incorporation.

Because an LLP has its own legal identity, it can buy property, sign contracts, borrow money and continue operating independently of its members. If the business owes money or faces legal action, liability is generally limited to the amount members have agreed to contribute, rather than extending to their personal assets.

This structure is particularly popular with solicitors, accountants, architects and consultants, but it's by no means limited to professional services. Any business run by two or more people may find an LLP worth considering.

How Does an LLP Differ from a Limited Company?

The two structures have more in common than you might expect, but they work quite differently.

A limited company has shareholders and directors, issues share capital, and pays Corporation Tax on its profits. Directors and shareholders can structure their pay in different ways, which is part of the appeal. The governance requirements are also fairly prescriptive.

An LLP has members rather than shareholders or directors. There's no share capital. Members run the business between themselves and are taxed individually on their share of the profits through Self Assessment, much like a traditional partnership. That makes the tax position of an LLP quite different to a limited company.

Neither structure is inherently better. It comes down to how you want to run the business, how profits will be divided, and your personal tax position. If you're not sure which suits you, speaking to an accountant before you register is time well spent.

What Do I Need to Register an LLP?

Before you start the application, it's worth getting the following together:

• At least two members. There's no upper limit on membership, and members can be individuals or corporate bodies.
• A registered office address. It needs to be a physical UK address in the same jurisdiction your LLP is registered in, whether that's England and Wales, Scotland, or Northern Ireland. This address goes on the public Companies House register, so if you don't want your home address publicly listed, a registered office address service is worth considering.
• A name. The name must be available and must end in "Limited Liability Partnership" or "LLP." Some words are restricted and may need additional approval before they can be used.
• Member details. For individual members, you'll need full name, date of birth, nationality, and service address. For corporate members, you'll need the registered name, number, and address.
• Proof of ID and address. ID checks are required for the account holder and all members as part of anti-money laundering regulations.

Do I Need an LLP Agreement?

Technically, no. But in practice, forming an LLP without one is something most people come to regret.

Without a written agreement, the default provisions under the Limited Liability Partnerships Act 2000 kick in automatically, and those defaults may not match how you actually want to run things. An LLP agreement covers how profits and losses are shared, what happens when a member wants to leave, how decisions get made, and what each member is responsible for.

Getting this right at the start is far easier than trying to resolve disagreements later. If you're forming an LLP with others, taking legal advice on the agreement before you register is a sensible step.

What Are the Ongoing Obligations?

Registering is the easy part. Once your LLP is up and running, there are a few ongoing obligations to stay on top of.

• Annual accounts. These need to be prepared and filed with Companies House each year.
• Confirmation statement. An annual confirmation statement confirms that the information Companies House holds about your LLP is accurate and current.
• Tax returns. The LLP needs to submit a partnership tax return to HMRC each year. Each individual member also files their own Self Assessment return to report their share of the profits.
• VAT. If the LLP's taxable turnover goes above the VAT registration threshold, it will need to register for VAT and submit regular returns to HMRC.

None of these are especially complicated once you have a system in place, but keeping on top of them from day one is much easier than trying to catch up later.

How to Register an LLP with Companies MadeSimple

Companies MadeSimple can register your LLP online. Most applications are submitted to Companies House the same day, with the majority processed within one working day, though this depends on Companies House workload at the time.

The LLP registration service includes registration with Companies House, your digital Certificate of Incorporation, and access to an online admin portal. You can also add a registered office address and member service address to keep personal addresses off the public register from the start. Here is also a guide to our ID check process to help you get your documents together.

FAQs

What is a Limited Liability Partnership?

An LLP is a business structure that gives members the flexibility of a traditional partnership alongside the protection of limited liability. It's a separate legal entity, so it can own assets and enter contracts in its own name. Members' personal liability is generally limited to what they've agreed to contribute to the business.

How is an LLP different from a limited company?

The main differences come down to ownership, management, and tax. An LLP has members rather than directors and shareholders, with no share capital. Members are taxed individually through Self Assessment, whereas a limited company pays Corporation Tax on profits. LLPs also have more flexibility in how they're governed internally.

How many members does an LLP need?

At least two. Members can be individuals or corporate bodies. There's no cap on how many members an LLP can have.

Do I need to be a UK resident to be an LLP member?

No. Members don't need to be UK residents or nationals. The LLP's registered office, however, must be a physical UK address in the correct jurisdiction.

Is an LLP agreement legally required?

No, but not having one is a genuine risk. Without an agreement, the default rules under the Limited Liability Partnerships Act 2000 apply, which may not reflect how you want to run the business. An LLP agreement covers profit sharing, decision-making, and what happens when a member leaves. It's worth getting legal advice on this before you register.

How is an LLP taxed?

The LLP itself doesn't pay Corporation Tax. Members pay Income Tax and National Insurance on their share of profits through Self Assessment. The LLP also submits a partnership tax return to HMRC each year. The specifics depend on individual circumstances, so speaking to an accountant is advisable.

Does an LLP need a registered office address?

Yes. Every LLP needs a registered office in the UK, in the same jurisdiction it's registered in. It must be capable of receiving post, and it appears on the public Companies House register. Many members use a professional registered office address service to avoid putting a home address on the public record.

What are the ongoing filing obligations for an LLP?

Annual accounts and a confirmation statement need to be filed with Companies House each year. Each member files their own Self Assessment return with HMRC, and the LLP submits a partnership tax return. If turnover exceeds the VAT threshold, VAT registration and returns are also required.

How long does it take to register an LLP?

Most applications are processed by Companies House within one working day. Applications submitted on weekends or bank holidays are processed the next working day.

Can I use my home address as the registered office?

You can, but it will be publicly visible on the Companies House register to anyone who searches for your LLP. A registered office address service lets you meet the legal requirement without putting your home address on the public record.

This article is for general information only and does not constitute legal or tax advice. Rules and requirements can vary depending on individual circumstances, so it's worth checking the latest guidance on GOV.UK or speaking to a qualified professional before making decisions.