Limited Liability Partnerships (LLPs)
Used by professionals who want a partnership model and limited liability
Why it's commonly used
- Allows partners to run a business together and share profits using an internal arrangement, but without the full personal risk that comes with a standard partnership. Each partner’s financial exposure is limited, making it a safer option for individuals in professions such as law, accounting, as well as consultancy.
- An LLP is a separate legal entity, meaning it can own assets, enter into contracts, and take on liabilities in its own name.
- LLPs retain the flexible, informal structure of a partnership. Partners can directly manage the business and agree internally on how profits, responsibilities, and decision-making are shared.
- Profits are taxed at an individual partner level, avoiding corporate double taxation via Corporation Tax.
- Allows the LLP to exist indefinitely - after an original partners retire or die.
- Widely recognised by professional regulators as the natural choice for regulated professions.
- One partner cannot be held liable for the professional mistakes or misconduct of another partner
💡 Best suited for: Accountants, solicitors, architects, consultancy businesses and anyone looking to operate a partnership model with the benefit of limited liability.
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