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Converting to LLP

An LLP or Limited Liability Partnership is a specific partnership formed under the Limited Liability Partnership Act 2000. It is in a way a half way house between a partnership and a company. It provides the members (which is what the partners are called) with limited liability. The LLP is a person at law and can employ staff and enter into contracts unlike a partnership. However, the members are taxed as individuals as in a partnership.

The key areas to consider when converting to an LLP are:

• Will all partners in the partnership become members of the LLP?
• Who will be the Designated Members?
• What classes of members (full, salaried, fixed share) will there be if any?
• What will be the capital put into the LLP?
• Will all partnership property transfer to the LLP?
• Are there assets being used to run the partnership not owned by the partnership that will be transferred into the LLP?
• What management structure will there be?
• What other key terms need to go into the new partnership agreement?

Property transferring from a partnership to an LLP is exempt from Stamp Duty Land Tax (SDLT).

At Ralli Partnership Law we have extensive experience of converting partnerships to LLPs and setting up LLPs. Please contact us for a free consultation.