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Company Law Question Watch

xxlovetodancexx
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Doing company law revision on incorporation at the moment and
Im really struggling to see why anyone would chose a Limited liability partnership over a company.
As surely a limited liability partnership only serves to limit investment options and still has onerus formal requirements?
Any help would be really appreciated as I'm really struggling to understand this!
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jjarvis
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(Original post by xxlovetodancexx)
Doing company law revision on incorporation at the moment and
Im really struggling to see why anyone would chose a Limited liability partnership over a company.
As surely a limited liability partnership only serves to limit investment options and still has onerus formal requirements?
Any help would be really appreciated as I'm really struggling to understand this!
Tax.

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xxlovetodancexx
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Thanks, dont know why I didn't put that together its really obvious
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nulli tertius
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(Original post by xxlovetodancexx)
Doing company law revision on incorporation at the moment and
Im really struggling to see why anyone would chose a Limited liability partnership over a company.
As surely a limited liability partnership only serves to limit investment options and still has onerus formal requirements?
Any help would be really appreciated as I'm really struggling to understand this!
There are a variety of reasons.

There remains a perception that professional practices should be run as partnerships and an LLP more nearly accords with public perception of how a professional business should be operated.

There is more flexibility in an LLP in that the constitution (the LLP agreement) is merely an agreement between the members that can say more or less anything with regards to profit share and participation in management. That constitution can be changed by agreement without any formal steps. The constitution remains a private document. A company's articles on the other hand is a highly prescriptive method of organising a business. It is difficult although not impossible to relate profit and management rights other than to capital contributed. The structure cannot be changed easily. In particular it is difficult to change profit sharing arrangements on an ad hoc basis. The structure must also comply with the Companies Acts.

There is a perception that LLPs have a more collegiate management structure than companies where power tends to reside in a controlling majority of capital.

LLPs are transparent for tax purposes. They do not pay corporation tax and the members are taxed as if they were partners. That means that a partnership can turn into an LLP without any tax consequences.
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xxlovetodancexx
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(Original post by nulli tertius)
There are a variety of reasons.

There remains a perception that professional practices should be run as partnerships and an LLP more nearly accords with public perception of how a professional business should be operated.

There is more flexibility in an LLP in that the constitution (the LLP agreement) is merely an agreement between the members that can say more or less anything with regards to profit share and participation in management. That constitution can be changed by agreement without any formal steps. The constitution remains a private document. A company's articles on the other hand is a highly prescriptive method of organising a business. It is difficult although not impossible to relate profit and management rights other than to capital contributed. The structure cannot be changed easily. In particular it is difficult to change profit sharing arrangements on an ad hoc basis. The structure must also comply with the Companies Acts.

There is a perception that LLPs have a more collegiate management structure than companies where power tends to reside in a controlling majority of capital.

LLPs are transparent for tax purposes. They do not pay corporation tax and the members are taxed as if they were partners. That means that a partnership can turn into an LLP without any tax consequences.
Thank you this is really really helpful!
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lisa8276
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Hello I need help with my public law mock essay. I can't figure out what the question is really asking for and I don't know how to structure it.. Please can you help me? Anyone?

‘[Constitutional] conventions represent important rules of political behaviour which are necessary for the smooth running of the constitution.’


(Allen and Thompson, Cases and Materials on Constitutional and Administrative Law, 9th edition, 2008)


What do you understand by the term ‘constitutional conventions’? Critically explore, giving examples, whether you consider constitutional conventions to be ‘necessary for the smooth running of the constitution’.


thank you
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