Llp?

[QueenElizabeth]

Heard from a friend as we were discussing PLCs that an acquaintance of his had his accountant recommend changing his PLC into an LLP. Presumably the Limited Liability Partnership is with his wife. And he just finished going through the process to change it.

This is the first I have heard of LLP. Obviously there must be some advantage an LLP might have over a PLC in that person's case, but I have no idea what. Is the tax liability different?

[pmeswani]

Heard from a friend as we were discussing PLCs that an acquaintance of his had his accountant recommend changing his PLC into an LLP. Presumably the Limited Liability Partnership is with his wife. And he just finished going through the process to change it.

This is the first I have heard of LLP. Obviously there must be some advantage an LLP might have over a PLC in that person's case, but I have no idea what. Is the tax liability different?

Are you sure he was a PLC and not just a Ltd?

The problem of being a LLP is that not many reputable companies will work with LLP's.... as the name suggests... limited liability... which means the contractor will only be limited in their liability if they screw up. Which means smaller payout if things go badly wrong.

[Moscow Mule]

Are you sure he was a PLC and not just a Ltd?

The problem of being a LLP is that not many reputable companies will work with LLP's.... as the name suggests... limited liability... which means the contractor will only be limited in their liability if they screw up. Which means smaller payout if things go badly wrong.

Eh? The limited liability refers to the individuals within the partnership, i.e. you're only responsible for your "portion" of the business not the amount any company may be able to claim from you in the event of a dispute.

I've worked with several agencies under an LLP, none of them were bothered by it.

[NickFitz]

as the name suggests... limited liability...

Umm... as in a Limited company?

[pmeswani]

Umm... as in a Limited company?

I wrote my reply whist thinking about a few other things. That'll teach me to multi-task.

[THEPUMA]

From a tax perspective, limited companies are better in many respects than LLPs. Some of our clients run partnerships alongside limited companies if they have particularly expensive cars which they want to expense on a business proporion basis instead of a 40p/25ppm basis.

[VectraMan]

As I understand it, an LLP means you're taxed like a sole trader/partnership but have the liability protection of a Ltd.

Can't see the advantage to that. Surely you'd pay more tax, and be no better off than with an umbrella?

[Moscow Mule]

As I understand it, an LLP means you're taxed like a sole trader/partnership but have the liability protection of a Ltd.

Can't see the advantage to that. Surely you'd pay more tax, and be no better off than with an umbrella?

The scope for expense is (I believe) wider under an LLP than an umbrella.

[mundungus]

I was told by an accountant some time ago that LLPs are exempt of IR35.

Apparently the IR35 rules are deliberately worded to catch high earning people who are in the government's eyes 'disguised employees' hiding behind limited companies.

If what he told me is true, it would be an advantage.

As far as I can tell, besided that, and the fact that a partnership implies more than one person, there isn't any difference between a Ltd co and an LLP.

[IR35 Avoider]

Partnerships are subject to IR35. I can't see any reason why an LLP would be exempt if an ordinary partnership isn't.