Limited Liability Partnerships

Since 2003, Healy Consultants Group PLC helps our multi-national Clients’ register Limited liability partnerships (LLP) in every country on the planet. The information below will help you understand the benefits of this entity:

  • What is an LLP?

    1. A limited liability partnership (LLP) is a hybrid of a limited liability company (LLC) and a general partnership (GP). The partners enjoy limited liability, but taxed as individuals;
    2. The LLP is legally tax exempt of corporation tax; but income tax is payable in the country of registration;
    3. Instead of shareholders, there are partners;
    4. Instead of directors, there are managers;
    5. Instead of a M&AA, there is a partnership agreement.
  • Advantages of an LLP

    1. In some countries, an LLP is legally tax exempt of all taxes including income tax and corporation tax and VAT and GST. Examples of such countries include UK, USA, Canada and Singapore;
    2. In most countries, it is faster to register an LLP than an LLC;
    3. The annual tax bill for an LLP is lower than an LLC; especially when the latter pays directors fees or pays dividends;
    4. In most countries, an LLC suffers corporation tax. Thereafter, dividend distributions suffer personal income tax, e.g. USA and Australia and India. Thus double taxation. The annual net profits of an LLP only suffer income tax;
    5. Global LLP’s are allowed to have corporate partners; thus supplying confidentiality and further limited liability;
    6. Annual net profits are distributed between partners in compliance with pre-agreed allocations in the partnership agreement; not in proportion to paid up share capital;
    7. In most countries, an LLP is not required to submit annual financial statements to independent statutory annual audit;
    8. In most countries, the paid up share capital is lower for an LLP;
    9. If required later, t is easy to convert an LLP to an LLC;
    10. Lastly, as mentioned, the income derived from the LLP is not taxed at the corporate level. Instead, the income is divided among the partners and is taxed at personal tax rates.
  • Disadvantages of an LLP

    1. In some countries, LLC’s enjoy more generous tax exemption brackets including Singapore and Ireland;
    2. In some countries, the tax bill for an LLP can be higher than that of an LLC; especially when the company neither pays directors fees nor dividends;
    3. It is easier to raise private equity and venture capital through an LLC.
  • Detailed comparison table contrasting LLC and LLP

    In most countriesLLPLLCCompany limited by guarantee
    Suitable for international trading of goods?YesYesNo
    Suitable for manufacturing?NoYesNo
    Suitable for professional consulting services?YesYesNo
    Separate legal entity from its owners?YesYesYes
    The owners enjoy limited liability?YesYesYes
    Corporate Income tax payable?NoYesYes
    Must file annual financial statements?YesYesYes
    Independent statutory annual audit required?NoYesYes
    Must file a legal annual return (click link)?NoYesYes
    Level of paid up share capitalLowHighN/A
    Stamp duty payable on transfer of ownership?NoYesNo
    Can raise capital through shares?NoYesNo
    Can act as a holding company?YesYesNo
    Company secretary required?NoYesYes
    Minimum number of partners/shareholders?211
    Can have corporate partners/shareholders?YesYesYes
    Annual directors fees can be paid?NoYesYes
    Regulated by the local Registrar of Companies?YesYesYes
    Access to double taxation treaties?YesYesNo
    Public register of partners/shareholders?YesYesYes

Contact us

For additional information on our Limited Liability Partnerships services, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Aidan Healy, directly:
client relationship officer - Aidan