Limited Liability Partnership (LLP): Complete Guide for UK Businesses
- Published: 23 January 2026
- 7 min read
- Starting a Company
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A limited liability partnership combines the operational flexibility of a traditional partnership with the personal asset protection seen in other corporate structures, such as limited liability companies including a private limited company. This hybrid business structure allows professional firms to operate as partners whilst shielding individual members from liability for other partners’ actions and disproportionate tax liability.
Key Takeaways
- LLPs combine partnership flexibility with limited liability protection
- UK LLPs require at least two designated members and registration with Companies House under the Limited Liability Partnerships Act 2000
- LLP members are taxed individually as self-employed rather than paying corporation tax, offering transparent tax treatment
What Is a Limited Liability Partnership
A limited liability partnership (LLP) is an entity that operates as a body corporate once LLP registered with the Companies House, whilst maintaining the internal structure and tax advantages of a partnership. Unlike traditional partnerships where partners face unlimited liability, LLP members enjoy limited liability protection against debts and obligations arising from other members’ actions.
The LLP structure creates a distinct legal personality separate from its members, allowing the entity to own assets in many countries, enter contracts, and continue operating despite changes in membership. This corporate entity status provides business continuity whilst preserving the flexible management approach valued by professional partnerships. In an LLP, profits and losses pass directly to individual partners for tax purposes rather than being subject to corporation tax at entity level.
LLPs were introduced in the UK by the Limited Liability Partnerships Act 2000, specifically designed for professional firms like law firms, accounting firms, and consultancy practices.
LLPs in the UK Business Structure
A general partnership is the broadest form of partnership in the UK, where two or more individuals or entities run a business together, without liability protection.
A limited liability partnership (LLP) is a distinct entity separate from its members, unlike a public limited company, which follows a shareholder-based ownership model. Unlike a general partnership, an LLP combines partnership flexibility with limited liability. It is not simply a subtype of a general partnership but a separate entity recognised under UK law.
A limited partnership (LP) is another specific partnership structure, where at least one director or partner has unlimited liability (the general partner) and other partners have limited liability (the limited partners). Like an LLP, an LP is a more narrowly defined structure with legal distinctions from a general partnership, but it does not provide the same broad liability protection to all partners as an LLP does.
Setting Up a Limited Liability Partnership
An LLP must have at least two members, who can be individuals or corporations with no maximum number, and must operate for profit. The partnership must choose a unique name ending with “Limited Liability Partnership” or “LLP” as its legal business name, ensuring it does not use the same LLP name as an existing registered entity. Unlike limited companies, LLPs have no minimum share capital requirements.
Incorporation requires registering with Companies House, submitting an official incorporation document through a company formation agent or directly, and providing designated member details and a registered office address within the UK, including England, Wales, Scotland, or Northern Ireland. Designated members take on legal responsibilities for statutory compliance and filings.
For a comprehensive guide to the LLP registration process, including required documents and timelines, please see our detailed article: How to Register an LLP.
The LLP agreement sets out active roles, profit sharing, decision-making processes, and procedures for adding or removing members. This partnership agreement is private and not filed publicly, unlike company articles of association. Members must also maintain statutory registers, including the register of members and People with Significant Control (PSC) register, ensuring transparency of ownership and control.
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LLP Compliance and Ongoing Obligations
LLP members face different tax obligations compared to company directors, with each member treated as self-employed for tax purposes. Individual partners must complete self-assessment returns declaring their share of LLP profits, whilst the entity itself files informational returns.
Designated members carry responsibility for ensuring the LLP meets its filing requirements with Companies House, whether submissions are made digitally or via paper forms where permitted. The LLP must also file annual confirmation statements with the Companies House and provide further information when changes occur to membership or registered details.
The entity must comply with ongoing statutory obligations including maintaining its registered office address and keeping statutory registers up to date. An insolvent LLP faces additional restrictions, with members potentially becoming personally liable.
All these requirements can be challenging to manage independently, so corporate service providers like Osome can save time and reduce compliance risks by handling accounting, statutory filings, and ongoing compliance efficiently and accurately. Learn more about Osome’s accounting services.
Examples of Limited Liability Partnership
A limited liability partnership (LLP) combines elements of partnerships and companies, offering limited liability to its members while maintaining tax transparency. LLPs are widely used in professional services, joint ventures, family businesses, and collaborative projects.
Typical examples include:
- Professional services firms: Law firms, accountants, and consulting agencies often operate as LLPs, sharing management responsibilities while limiting personal liability within the group.
- Family businesses: Some family-run enterprises choose LLPs to structure management and profit sharing while maintaining limited liability.
- Joint ventures: Businesses may form an LLP to collaborate on specific projects, such as property development or research initiatives.
- Creative partnerships: Agencies in advertising, design, or media production sometimes structure as LLPs to combine multiple freelancers or small businesses into a single legal entity that shares clients.
LLPs are particularly popular with lawyers, consultants, and other service-based professionals. They’re tax-transparent, which means you can structure the partnership so that non-UK income is not taxed in the UK while still benefiting from the reputation of operating through a UK entity.
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How Osome Can Help
Osome supports entrepreneurs with LLP formation, accounting, and compliance services throughout the UK. Our consultants help founders choose the most suitable business structure and jurisdiction, providing registered address services, ongoing compliance support, and expert guidance on partnership agreements to ensure your LLP operates effectively from incorporation onwards.
Summary
Limited liability partnerships offer professional firms an ideal balance between partnership flexibility and corporate liability protection. The structure protects personal assets whilst maintaining tax transparency and operational autonomy. For eligible businesses seeking to combine collaborative management with limited liability protection, LLPs provide a compelling alternative to traditional partnership or limited company structures. Consider professional advice to ensure the LLP structure aligns with your business objectives and compliance capabilities.