5d LLPs

Question 1

What is an LLP?

Answer 1

A Limited Liability Partnership. This is a partnership that has its own legal identity and registered on Companies House.

Question 2

How is an LLP formed?

Answer 2

Incorporation document submitted to CoHo.
- Name of LLP, registered address of the company, addresses of members and which members are designated (one who does admin and filing duties).
- Statement must be made by solicitor engaged in formation that all LLP Act 2000 conditions have been satisfied.

Question 3

What are the main provisions in the LLP Act?

Answer 3

• no max amount of members.
• new members can only be admitted with agreement of all members.
• A person can cease to be a member providing reasonable notice is given and CoHo must be notified within 14days.
• Every member can take part in management.

Question 4

Does an LLP need to file accounts to CoHo?

Answer 4

Yes, the same as though it were a company and can claim exemption from filing requirements and requirement for an audit.

Question 5

If an LLP needs to file accounts on CoHo annually, do they need a directors/members report as well?

Answer 5

No, this is not a requirement.

Question 6

Highlight 4 rules an LLP must comply with.

Answer 6

1. Maintain a register of charges and register charges with the Registrar.
2. Notify the Registrar of any changes to the membership or registered office.
3. Provide the name of the LLP on correspondence and outside its place of business.
4. File a confirmation statement.

Question 7

Who has authority in an LLP?

Answer 7

All partners are agents of the firm and can therefore bind them in contracts.

Question 8

Is an LLP it’s on separate legal identity?

Answer 8

Yes, it therefore enters contracts in its own name.

Question 9

Say the LLP was to go into liquidation, would the partners be liable to the debts?

Answer 9

No, the LLP is liable to its own debts and the member’s liability is capped at its capital contribution.

Question 10

What happens when an LLP is terminated or dissolved?

Answer 10

• propose a voluntary arrangement.
• apply for the LLP to be put in administration.
• agree to go into compulsory or voluntary liquidation.

Question 11

Law relating to companies’ insolvency generally apply to LLPs. What are the 2 exceptions?

Answer 11

1. If members make withdrawals 2 years prior to winding up, these may be clawed back if the member knew or should have known the LLP would become insolvent.
2. On winding up, members may be called on to contribute to the assets of the LLP should this be in the partnership agreement.