LIMITED LIABILITY PARTNERSHIP

Limited Company

Partnership

Sole Traders

Contractors

Self Employment

Limited Liability Partnership

Landlords

Freelancers

Charities

A Limited Liability Partnership (LLP) is an alternative legal structure that was introduced in 2001 by the LLP Act 2000. It is an ideal set-up for the types of professions that normally operate as a traditional partnership, such as solicitors, accountancy firms and dental practices.

An LLP shares the same characteristics as a normal partnership structure in terms of tax liability, internal management and the distribution of profits, but it provides reduced financial liability, or ‘limited liability’, to each partner. Traditional partnerships place the full burden of business debts upon the partners. LLPs place reduced financial liability upon the partners, which is a more desirable option for many people. It is similar to the financial protection offered to limited company owners.

An LLP is a great alternate structure for any business that currently operates as a traditional partnership with a small and consistent number of members who each make comparable contributions and draw similar profits.

Difference Between LLP and Partnership Firm

A Limited Liability Partnership (LLP) and a partnership firm are two types of business structures through which partners can carry out their business. A minimum of two persons willing to be partners are required to establish an LLP or a partnership firm. LLP is a new concept, while a partnership firm is an old concept.

The concept of LLP was introduced in 2000 through the Limited Liability Partnership (LLP) Act. Though an LLP and partnership firm requires a partnership between two parties for its establishment, it has many differences.

Companies can be limited by guarantee, meaning non-profit organisations can use the structure. LLPs, on the other hand, are solely for profit-making businesses.
One person can set up a limited company and fulfil the role of shareholder and director. A limited liability partnership must consist of at least two ‘designated’ members who take responsibility for statutory filing and other legal requirements, but there can be an unlimited number of ‘ordinary’ members.
Limited companies pay corporation tax but members of limited liability partnerships pay income tax through self-assessment.
The internal structure of a limited company is inflexible, whereas that of an LLP can be changed by its members.
Limited companies can sell shares to secure capital investment, but limited liability partnerships do not have shares.

Who are the owners of the partnership ?

An LLP is owned by its members who have certain responsibilities, including acting in accordance with the partnership agreement. Designated members take on additional responsibilities, which include:

Registering the partnership for self-assessment, and VAT if applicable
Keeping proper accounting records
Preparing and filing annual accounts and an annual confirmation statement with Companies House
Informing Companies House of any changes to the business, such as the registered office or members’ details
Appointing an auditor if required
Acting on behalf of the LLP should it be dissolved or wound up

Why PRS Smart for the Limited Liability Partnership ?

Looking for reliable, affordable LLP accountants? At PRS Smart Accountants, we specialise in fixed-fee accounting services for Limited Liability Partnerships (LLPs) across the UK. Whether you’re setting up a new LLP or managing an established partnership, our experienced team is here to help you stay compliant, tax-efficient, and financially organised.

We understand the unique structure and responsibilities of LLPs, and we offer tailored support to ensure your partnership meets all HMRC and Companies House requirements, without the stress.

Although we’re based in London, we work with LLPs all over the UK. Using secure cloud systems, email, and video calls, we provide seamless remote support backed by a personal, friendly approach.

You’ll get a dedicated accountant who knows your LLP business and is easy to reach, no call centres, no jargon, and no being passed around.

Whether you’re an LLP in professional services, construction, consultancy, or the creative sector, we’ll give you the same attention to detail and proactive advice.

We will submit a self-assessment tax return for each partner and the partnership. Hence helping to keep things simple and straightforward at your end. Each partner will pay income tax on their share of the profits. We can offer you expert advice and guidance.

We also deal with all HMRC correspondence and advise you on what action to take. The tax due on the business profits is due to be paid by instalments. Therefore we help you keep on top of deadlines. So there won’t be any nasty fines coming your way.