What is an LLP? Limited liability partnerships explained

A limited liability partnership is a body corporate registered at Companies House with its own legal personality, so it contracts and owns assets in its own name and members are not personally liable for its debts beyond what they have agreed to contribute.

For tax it behaves like a partnership: transparent, with profit allocated to members and taxed on them personally. That combination of corporate protection and partnership taxation is why professional firms use it.

An LLP needs at least two members, and at least two of them must be designated members. Designated members carry the filing responsibilities: accounts, the confirmation statement, appointing auditors where required and signing off documents.

Members are not employees of the LLP and are self-employed for National Insurance, unless the salaried member rules catch them.

There is no legal requirement to have one, but without it the default statutory provisions apply, including equal profit shares regardless of contribution, and no power to expel a member. Almost no LLP actually intends that outcome.

A good agreement covers profit allocation and drawings, capital contributions, decision making, what happens when a member joins, leaves or dies, and how the tax reserve works.

Accounts at Companies House within nine months of the period end, prepared under FRS 102 Section 1A or FRS 105 where eligible, with the same late filing penalty scale as a company.

An SA800 partnership return to HMRC by 31 January after the tax year, with a £100 penalty per member for lateness, plus each member's own Self Assessment return. A confirmation statement and PSC register are required as well.