LLP stands for Limited Liability Partnership. What is its specificity? At least two entities, individuals or legal entities in any combination are needed to form a partnership. To register a partnership, you must have a legal address in the UK (which is provided by our company). Most customers avoid using their home address for security purposes. When registering, a form is filled in, and each partner provides a copy of the passport and confirmation of the registration address for individuals or a company registration certificate with a copy of the director’s passport and confirmation of his/her residence address. The partners can be citizens of any countries.
Company registration time is 24-48 hours. Upon registration, partners receive a registration certificate. The partners draw up a partnership agreement with each other. Our company provides it to our customers. The agreement indicates the equity participation of all partners, however, this equity or interest ownership of the business does not pass through Companies House, but can be apostilled. After having received a certificate and registration, if you live in the UK, you can go to the bank to open a partnership account. You will need to have both partners present in the bank or one of them can give a power of attorney (we provide power of attorney) to the other partner for the right to open an account.
However, if you are outside the UK your documents must be apostilled. You can open an account for a partnership in any country. We would like to note that in England there is no law on printing; you can make a seal according to your wishes in your country of residence. We can order print in England if you wish. You must open a bank account yourself, as according to the Law prohibits the banks to work with third parties who represent the company. The partnership has no shares, which means selling a part of the business to receive investments is very difficult; you should be aware of it when registering.
Partnerships are most often used by service companies or manufacturing ones. As for taxation, the partnership submits reports just like Ltd, but does not pay Corporate TAX. After receiving the taxable income, it is divided between the partners according to the equity participation specified in the Agreement, and then the specified amount is taxed as Individual Income of each partner according to the laws of the country of residence of this partner. For example, the residents of England and France formed a partnership and made a profit of 100 pounds; let’s assume that their share is 50% -50%. After submitting the report to the British Tax Administration and splitting the profit to 50 pounds, they are obliged to indicate it in the income statement in their country, which will be taxed according to their country of residence. This tax may differ, as well as the amount of the final profit of the partners. It is clear that the partnership cannot pay dividends as the company does not have any Shares. There is no director in LLP who would go through registration at Companies House. However, the partnership has the right to appoint a director and give the right to manage the business including opening a bank account. In this case, the director will act under the power of attorney. If you have any questions about the partnership, we will be happy to answer them.