| Limited Liability Partnerships |
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Limited liability partnerships, also referred to as LLPs, are similar to regular partnerships, with the main difference being they offer a reduced responsibility to partners on business liabilities, such as debt. A main benefit of limited liability partnerships is that its partners can limit their personal liability for certain issues such as employee liability. LLPs also provide flexibility with voting rights and partnership assets rights on the termination of the partnership. This can prove beneficial to new and retiring partners. Deed for limited liability partnerships It is important to frame a document for the limited liabilities partnership stating the duties, responsibilities and rights of all partners of the partnership and the day-to-day running of the business.The deed should state the necessary steps to be taken if the partnership is dissolved, whilst providing details of profit share of the company. You can include monthly salaries within the agreement to help prepay profit shares. Limited liability partnerships can include details for holiday arrangements for different partners and set rules for partners that have outside interests. Taxing of limited liabilities partnerships The tax payable of an LLP is similar to that of a traditional partnership. However, partnership profits are considered to be the income of partners and each partner is therefore assessed based on their share of the LLP income and profits. If a traditional partnership converts to a LLP, stamp duty is exempted as long as all partners of the traditional partnership convert to a LLP with similar interests. |