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Limited
Liability Partnerships are a new form of business
entity with limited liability. However, the members
of an LLPs will be free to agree amongst themselves
the relationship between them, rather as partners
do in a partnership. The LLP itself will be a separate
legal entity owned by the members which means that
the LLP will be able to continue in existence independent
of changes in membership.
The
Limited Liability Partnerships Act 2000,
The
Limited Liability Partnerships Regulations 2001
and
The Limited Liability Partnerships (Fees) (No.2) Regulations
2001 are now in force. Interested firms can now
register as an LLP with companies House. The
Companies House website contains guidance on registration
and information on LLPs generally.
On
7 March 2001 the Inland Revenue made an announcement
confirming that LLPs will in general, be treated for
tax purposes as a business carried on by partners
in a partnership, and confirmed the guidance set out
in their December Tax
Bulletin. The announcement also confirmed that
following consultation on the possible alternative
uses of LLPs, which was announced in the Pre-Budget
Report, legislation would be brought forward to ensure
that use of the new structure does not lead to tax
loss when used as an alternative to existing business
structures. Details of the announcement can be found
at www.inlandrevenue.gov.uk/bulletins
On 8 November the Chancellor
of the Exchequer announced in the Pre
Budget Report that the commencement date for
registration as a Limited Liability Partnership will
be 6 April 2001. The date coincides with the start
of the personal tax year allowing a smoother transition
for existing firms wishing to incorporate as LLPs.
Once
the Insolvency Act 2000 has been fully implemented,
it will be applied, as appropriate, to LLPs. We expect
to lay these regulations in the Autumn.
If
you cannot find the information you need on this web
site, please contact us.
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