Establishing an LLP in England and Wales

A limited liability partnership, commonly referred to as an LLP, is a flexible business structure combining separate legal personality and limited liability with the organisational features of a partnership. It may be suitable for professional practices, joint ventures, investment structures and other businesses whose participants wish to operate together without incorporating a conventional limited company. 

An LLP established in England and Wales is registered with Companies House and exists as a legal entity separate from its members. It can enter into contracts, employ staff, acquire assets, incur liabilities and conduct legal proceedings in its own name. Its members will not ordinarily be personally responsible for the LLP’s debts solely because they are members, although personal liability may still arise in certain circumstances, including under guarantees or in cases involving misconduct. 

Our London office assists domestic and international clients with establishing LLPs in England and Wales and putting in place an appropriate legal and governance structure. 

The legal and regulatory framework 

LLPs are principally governed by the Limited Liability Partnerships Act 2000, the Limited Liability Partnerships Regulations 2001, and related regulations. Certain aspects of UK company law also apply to LLPs, including requirements concerning registration, accounts, transparency, persons with significant control and filings with Companies House. 

An LLP must be formed by at least two persons carrying on a lawful business with a view to profit. Its members may be individuals or legal entities, including overseas companies. At least two members must ordinarily be designated members, with additional responsibility for the LLP’s statutory records, accounts, confirmation statements and other compliance obligations. 

An LLP registered in England and Wales must have an appropriate registered office address within that jurisdiction. It must also provide a registered email address to Companies House. Certain information about the LLP, its members and persons with significant control will appear on the public register. 

Individual members and persons with significant control are subject to Companies House identity-verification requirements, in accordance with the applicable commencement and transitional arrangements. Separate requirements for corporate members are being introduced on a phased basis.  

The establishment process 

The process of forming and organising an LLP will generally involve: 

• Assessing whether an LLP is the appropriate structure, taking account of the proposed activities, ownership, management and tax position; 
• Identifying the proposed members, including any individual, corporate or overseas members; 

• Selecting the LLP’s name and checking its availability and compliance with naming restrictions; 

• Determining the registered office and email addresses to be provided to Companies House; 

• Identifying the designated members and persons with significant control; 

• Completing the identity-verification requirements applicable to the proposed individual members and persons with significant control 

• Preparing and submitting the incorporation application to Companies House; 

• Drafting and executing an LLP agreement governing the relationship between the members; and 

• Completing the necessary post-incorporation arrangements, including tax registration, banking, record-keeping and ongoing compliance procedures. 

Once Companies House accepts the application, it issues a certificate of incorporation confirming the LLP’s legal existence. 

The importance of an LLP agreement 

Although an LLP can exist without a bespoke written agreement, relying on the statutory default provisions may produce outcomes that do not reflect the members’ commercial intentions. A carefully drafted LLP agreement is therefore an important part of the establishment process. 

The agreement may regulate: 

• capital contributions and financing; 

• allocation and distribution of profits and losses; 

• management responsibilities and voting rights; 

• admission, retirement and expulsion of members; 

• decision-making and reserved matters; 

• duties, restrictions and confidentiality obligations; 

• intellectual property and business opportunities; 

• illness, incapacity or death of a member; 

• restrictive covenants; 

• dispute-resolution procedures; and 

• dissolution or winding up of the LLP. 

The agreement should reflect the intended commercial relationship and provide workable mechanisms for resolving deadlock, changes in membership and other significant events. 

How we can assist 

We can advise on whether an LLP is suitable for the proposed business and explain how it compares with a private limited company, general partnership or other available structure. 

Our assistance may include conducting name and preliminary compliance checks, preparing the incorporation documentation, advising on ownership and control, identifying persons with significant control and coordinating the Companies House registration process. We can also draft an LLP agreement tailored to the members’ respective contributions, responsibilities, profit entitlements and decision-making arrangements. 

Following incorporation, we can assist with commercial contracts, membership changes, internal resolutions, regulatory filings and ongoing governance. Where specialist tax treatment or accounting arrangements require consideration, we can coordinate with the client’s tax and financial advisers. 

Our multilingual team can provide assistance in English, Hungarian, German, Spanish, Russian and Turkish. We are therefore well placed to support international founders, overseas businesses and cross-border professional practices seeking to establish and operate an LLP in England and Wales. 

By obtaining coordinated legal advice from the outset, clients can establish an LLP that meets the relevant registration requirements and provides a clear, practical framework for the members’ future business relationship.