Companies and LLP's - Info Flashcards
(11 cards)
What is a Limited Liability Partnership (LLP)?
An incorporated business structure giving members limited liability, created under the LLP Act 2000.
What is the legal status of an LLP?
It is a separate legal person that can own property, sue, be sued, and contract in its own name.
Who can form an LLP?
Two or more people carrying on a lawful business with a view to profit — not individuals or non-profits alone.
What must an LLP name include?
The name must end with ‘LLP’.
Are LLP members liable for business debts?
No, liability is limited to the amount they invest.
How are LLPs taxed?
Treated like partnerships: individual members pay income tax as self-employed persons.
What are designated members in an LLP?
Specific members responsible for administrative tasks (e.g. filings with Companies House).
Is an LLP agreement required by law?
No, but it’s strongly recommended; otherwise, default rules in the LLP Act 2000 apply.
What is the default profit-sharing rule in LLPs?
Profits and capital are shared equally unless the agreement states otherwise.
Can LLP members be expelled?
Yes, a majority can expel a member under the default rules.
Do LLP members get paid for managing the firm?
Not unless agreed otherwise — no default right to management payment.
