Limited partnerships and Limited Liability Partnerships (LLPs)

Your liability for business debt differs depending on whether you’re a limited partnership or limited liability partnership (LLP).

You can share all the business’s profits between the partners. Each partner pays tax on their share of the profits.

Limited partnerships
The liability for debts that can’t be paid in a limited partnership is split among partners.
Partners’ responsibilities differ as:
  • ‘General’ partners can be personally liable for all the partnerships’ debts 
  • ‘Limited’ partners are only liable up to the amount they initially invest in the business 
General partners are also responsible for managing the business.

You can set up a limited partnership to run your business.

You must have at least one ‘general partner’ and one ‘limited partner’.

General and limited partners have different responsibilities and levels of liability for any debts the business can’t pay.

All partners pay tax on their share of the profits.

You’ll need to:

The rules are different for setting up a limited liability partnership, an ‘ordinary’ business partnership or a private limited company.

You can set up (‘incorporate’) a limited liability partnership (LLP) to run a business with 2 or more members.

A member can be a person or a company, known as a ‘corporate member’.

Each member pays tax on their share of the profits, as in an ‘ordinary’ business partnership, but isn’t personally liable for any debts the business can’t pay.

You’ll need to: