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GENERAL FACTS
The United Kingdom consists of England, Scotland, Wales and Northern Ireland. It is located on the Western Coast of Europe with an area of approximately 241,590 sq km.

The population of the United Kingdom is approximately of 58 million. At least 9 million live in the Greater London area; 5.25 million live in Scotland; 1.5 million live in Northern Ireland; 1.5 million live in Wales. The United Kingdom Limited Liability Partnership Act (UK LLP Act 2000) entered into force the 6 April 2001 in the jurisdictions of England, Wales and Scotland. With this Act, two or more persons may start a business with a view to profit by simple registration into the UK Companies House.

The guiding principles of the UK LLP are similar to the United States Limited Liability Companies (LLC). The UK LLP has become a very interesting vehicle for use in international trade operations as it offers a structure that limits the liability of its members, whilst keeping the flexibility and the advantages of an LLC.

 
EXEMPTIONS AVAILABLE FOR LLP’S
For certain small LLP’s there is a total exemption in the audit if they are eligible and wish to take advantage of it. A small LLP must have at least two of the next three conditions:
  • Annual turn over of £5.6 million or less.
  • Balance sheet of £2.8 million or less.
  • Average number of employees of 50 or fewer.

A dormant LLP may benefit from an audit exemption. An LLP can qualify as “dormant” if it does not have any significant accounting transaction during certain period of time.

An exemption of the auditing will release the LLP from the obligation of requiring that an auditor examine all the LLP’s accounting records and prepare a report for the LLP based on his findings from its records.

 

 
ADVANTAGES OF A LLP IN UNITED KINGDOM
  • It is a legal entity separate from its partners; thus, the debts incurred are debts of the LLP.
  • The partners’ limited liability reduces the risk for actions from the creditors of the LLP, directed against its partners.
  • The partners in the Limited Liability Partnership can manage it, without the risk of losing their limited liability.
  • It has unlimited capacity, as the LLP does not have statutory restrictions on its activities.
  • The LLP can own and hold property, employ personnel and enter in contractual obligations.
  • The internal structure is flexible; and facilitates the management of the LLP.
  • It can be formed by individuals or legal entities and the registrar is not concerned about the person acting in a personal or representative capacity.
 

 

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