Limited liability partnerships Flashcards
(6 cards)
1
Q
briefly, what is an LLP? What is required?
A
business structure which combines elements of a partnership and company
Must have at least 2 designated members (designated members have administrative responsibilities i.e. delivering information to CH)
2
Q
what governs the LLP?
A
LLP Regulations provide a default contract in the absence of agreement
3
Q
how is an LLP formed?
A
Must be incorporated by CH (LLP agreement need not be filed)
4
Q
how is an LLP taxed?
A
Each partner pays tax on their share of the profits (individual partners pay IT + CGT, companies pay corporation tax)
5
Q
what are the advantages of LLPs? (2)
A
- Has SLP so members have limited liability
- Flexibility in terms of management structure
6
Q
what are the disadvantages of LLPs? (2)
A
- Administrative & accounting requirements i.e. member details, charges & mortgages, annual accounts to be filed with CH (the information is publicly available)
- More costly to start the business (due to registration fees)
