What is an LLP?
Definition of an LLP
An LLP is a Limited Liability Partnership. An LLP is a way to structure a business legally in the UK, as a hybrid between a partnership and a limited company.
Owners of a LLP are called 'members' rather than 'partners'.
An LLP is taxed like a partnership, with tax returns being filed for the LLP and for each member, and each member being taxed on their share of the profits.
But if a LLP is sued, then, like the directors of a limited company, the members' personal assets aren't at risk unless they've given personal guarantees or been guilty of wrongdoing.
A LLP must also file accounts and an Annual Return each year with Companies House. These are then available for public viewing.
Disclaimer: The content included in this glossary is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this glossary. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.