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Newsletter | Articles The UK Limited Liability Partnership – What ILS Can Provide The UK LLP Act was largely brought about after pressure from professional firms in the UK who pointed to the establishment of such entities in Jersey. Many professional firms in the UK had in fact already formed Jersey LLPs rather than expose themselves to the unlimited liability of the traditional professional partnership. As with the LLC, the liability of the members is limited to their contribution and as no minimum is set that could be zero. It is important to note that in the event of insolvency, certain provisions of UK insolvency law may well apply to the members as if they were directors of a UK Limited Company. There must be at least two members but they may be corporate and resident anywhere in the world. Statutory requirements The preparation and filing of accounts at UK Companies House, as if it were a Limited Company, must be done. These accounts do not have to be audited unless the turnover exceeds £1 million. This limit is likely to increase in the future. An incorporation document must be filed stating the name and the registered address of the LLP. This document must also state the names and addresses of the members and whether they are designated members who have specific responsibilities for certain statutory matters such as filing papers at Companies House. Taxation Taxation treatment is very similar to that of the LLC, with transparency being the key feature. It is important to note that the UK government will be introducing specific anti-avoidance legislation to prevent the use of the LLP for certain investment activities. The Inland Revenue has also stated that they will remove interest relief for investments made into certain types of Investment LLPs so that individuals will not be able to claim tax relief on monies borrowed to invest in the LLP. Care must therefore be taken not to fall into these traps. Summary A UK LLP especially given that it can be controlled from outside the UK, may have wide trading applications with no liability to UK tax providing that it has been properly structured. What ILS can provide: Structuring/establishment of the vehicle Establishment of bank accounts Preparation of operating agreement Administration Accounting Officers of the company, subject to restrictions For more information on how ILS can establish and structure UK LLPs please contact Stephen Colderwood.