What are the benefits of forming an LLP?

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I’m curious what I would get from forming an LLP. I’m an accountant, currently working as a sole trader. But I might be teaming up with a few colleagues to incorporate as an LLP. What would I (and my colleagues) get out of that? What are the benefits?

Cheers

Ewan

Answers

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The main benefits of forming an LLP are limited liability and improved professional status. It is the perfect business structure for anyone who wishes to set up a professional services firm as a partnership. For this reason, LLPs are popular with accountants, solicitors, surveyors and medical professionals.

Limited liability Currently, as a sole trader accountant, you have unlimited liability for business debts. This means your personal assets are at risk if anything goes wrong. As the member of an LLP, you will still enjoy the same benefits of self-employment like you do as a sole trader, but you will be able to limit your liability for business debts to whatever you invest in the partnership. This is the same for the other LLP members.

Professionalism In terms of professional status, this will be improved if you operate through an LLP because incorporated businesses are held in higher regard. Your LLP will be viewed as an established and reputable business due to the fact it is registered at Companies House with limited liability and has to adhere to stricter regulations and reporting requirements.

You can find out more about setting up and running an LLP here.

a year ago
 

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