Scottish LLP

FACTS & INFO

• Corporate Information

  LEGAL FORM

  A partnership is formed by two or more persons carrying on a business in common with a view of profit. The Partnership Act 1890, which still applies today, provides that a Scottish firm has a separate legal personality from its partners, enabling it to enter into contracts and hold property in its own name. However, it should be noted that the partners of the firm are personally liable for the debts of the firm.

  A limited liability partnership (LLP) is the latest business vehicle in the UK, having been introduced on 6 April 2001 after the Limited Liability Partnerships Act was passed in 2000. The introduction date was used to coincide with the Inland Revenue tax year, due to the way that LLPs are taxed. An LLP may be seen as a hybrid between limited liability companies and traditional partnerships, in that it offers the limited liability available to limited company shareholders combined with the tax regime and flexibility available to partnerships. Prior to this legislation, it was only a private or public limited company that offered limited liability to all of its members. The key advantage of an LLP compared with a traditional partnership is that the members of the LLP (it is important that they should not be called partners but members) are able to limit their personal liability if something goes wrong with the business, in much the same way as shareholders in a limited company are able to.

  An LLP should draw up a deed of partnership at the time of formation, which is a legally binding agreement between members laying out the rights and responsibilities of each party to the agreement. Alongside administrative details such as the names and addresses of members, the deed will also include details on the amount of capital each partner will inject into the business, what their individual roles and responsibilities will be in running the business, and what will happen if a partner leaves the business.

  COMPANY NAME

  Scottish LLPs must use the suffix "Limited Liability Partnership" or "LLP" to denote limited liability, and can use any name unless it includes words such as "Empire", "Crown", "Imperial", "Windsor", "Royal", "Assurance", "Bank", "Building Society", "British", "National", "Great Britain", "United Kingdom", "England", "English", "Scotland", "Scottish", "Wales", "Welsh", "Ireland" or "Irish". The initials "GB" or "UK" do not require approval. "European" will not be approved if it implies an unjustifiable connection with the EU. To use "International" as a prefix, major trading activity must be conducted overseas; to use it as a suffix, company activity must be in two or more overseas countries. Any other words deemed sensitive or offensive will not be permitted.

  MEMBERS AND COMPANY SECRETARY

  Individuals or existing businesses can be members of a limited liability partnership, and the LLP must have at least two members. The minimum capital contribution is £2. The rights and responsibilities of all members would usually be laid out in the deed of partnership. Designated members have the same rights and duties towards the LLP as any other member. The LLP agreement and the general law governs these mutual rights and duties.

  An LLP will typically select a designated member (or members) to be responsible for maintaining communications with Companies House, preparing accounts, and acting on behalf of the LLP if, for some reason, it is dissolved further down the line.

  The members of an LLP are free to agree among themselves the relationship between them in a similar way to partners in a partnership. The LLP itself is a separate legal entity, owned by the members. This means that the LLP is able to enter into contracts and hold property, and the LLP is able to continue in existence independent of changes in membership. What is important is ensuring that the agreement between members addresses the issue of management, particularly as an LLP does not have to have a formal member’s agreement on creation.

  There is no statutory requirement for a company secretary to be appointed.

  REGISTERED OFFICE

  Every LLP must have a registered office in Scotland, which is the address to which any formal communications may be sent. The LLP may change its registered office at any time by completing a special form, but the change only takes effect when it is registered at Companies House. The registered office must be a physical location as people have the right to visit the office to inspect certain registers and other documents. They should also be able to deliver documents there by hand.

  MEETINGS

  Company meetings need not be held in the UK or Scotland.

  INCORPORATION TIME

  The incorporation time for a Scottish LLP is usually 5 working days.

  RECURRING MAINTENANCE FEES

  As from the second year, there are recurring maintenance fees of $600. These include:

  • Provision of registered office
  • Provision of company secretary
  • Preparation and submission of annual return

• Taxation

  TAXATION

  The corporate income tax for Scottish LLPs is zero. Each partner pays income tax separately, which depends on the state where a partner is registered as a taxpayer. LLPs are taxed differently from companies in that the profits are treated as personal income of the members, as if they had run their business as a partnership. LLPs are tax transparent for Scottish purposes. For LLPs which have no business activities in the UK, do not derive any income from UK sources, and are managed and controlled by members who are not UK residents, members are not regarded as residents for tax purposes in the UK and, therefore, are not entitled to take advantage of international double taxation agreements concluded by the UK with other countries.

  AUDIT AND ACCOUNTING

  LLPs must produce and publish financial accounts with a similar level of detail to a similar sized limited company and will have to submit accounts and an annual return to Companies House each year. This publication requirement is far more demanding than the position for normal partnerships and some specific accounting rules may lead to different profits from those of a normal partnership. The legislation also requires that the profit share of the highest earning member is published if the LLP's profits exceed £200,000. A further tax consideration arises in respect of overseas operations. A 'nominated' member of the LLP will be responsible for informing the Inland Revenue of the LLP's existence and for filling in the annual partnership tax return. This return will also contain a partnership statement which shows how profits have been divided up amongst the members.

• Our Services and Requirements

  OUR SERVICES INCLUDE:

  • Name check and approval
  • Filling of the incorporation documents with Companies House
  • A standard set of original corporate documents
  • Payment of the government fee
  • Provision of a registered office and registered address for one year
  • Provision of a company secretary for one year
  • Rubber stamp

  Please note: If applying for a corporate bank account outside of the UK you will need to order a full set of apostilled company documents.

  DOCUMENTS REQUIRED:

  Please provide the following documents for all directors, shareholders, beneficial owners, and authorised signatories:

  • Notarized copy of valid passport.
  • Original or Certified copy of utility bill / bank statement (as verification of residential address, dated within three months).
  • Original or certified copy of Banker’s reference letter (dated within three months).
  • In cases where shareholders and/or directors are corporate bodies, full apostilled set of corporate documents and certificate of good standing (for companies registered more than one year).

  IMPORTANT NOTE: LICENSABLE BUSINESS ACTIVITIES

  If you conduct any activity without the required license or authorisation granted by a relevant authority in any jurisdiction, New Company will not be able to assist you with the company formation or bank account opening related to such unlicensed activity.

  Licensable activities include, but are not limited to: provision of financial services involving trading/brokerage in foreign exchange, financial and commodity-based derivative instruments and other securities; offering investment advice to public; insurance and banking; operation and administration of collective investment schemes and mutual funds; payment processing services; money exchange, money transmission or money brokering; asset management; safe custody services; gaming, gambling and lotteries.

  Please contact us if you need assistance in the licensing of your financial, Forex brokerage or gambling company.

  SHIPPING COSTS

  Shipping of corporate documents or banking kits to your destination requires an extra charge and will be automatically added to your order during checkout. Shipping costs for international courier services are set automatically depending on geographic zones.