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Introduction

This booklet is a guide to administering and managing a limited liability partnership. It covers limited liability partnerships formed and registered in England, Wales and Scotland.

The booklet:

You will find the relevant law in the Limited Liability Partnerships Act 2000, and in the Limited Liability Partnerships Regulations 2001 which apply parts of the Companies Act 1985 (as amended in 1989 and later) to limited liability partnerships.

If after reading this booklet, you are in doubt about your responsibilities, you should seek professional advice from a solicitor or accountant.

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CHAPTER 1
Members' and designated members' responsibilities

Section 1.1 Membership of a limited liability partnership

1. Who are the members of a limited liability partnership?

When a limited liability partnership is formed, the members are the people named on the incorporation document. At least two members must be appointed as 'designated members' - see question 4 below.

A limited liability partnership must have at least two members. If membership falls to only one member and the limited liability partnership continues to carry on business for more than 6 months, then the benefits of limited liability are lost.

Every member is the agent of the limited liability partnership and the partnership is bound by anything done by a member on its behalf unless:

2. When does a member cease to be a member of a limited liability partnership?

Members cease to be members:

In dealings with other people, a former member will be regarded as still being a member unless notice that the former member had ceased to be a member had been:

Ex-members must not interfere with the management or administration of the limited liability partnership.

3. Must any change of members be notified to the Registrar?

Yes. Notice that a person has become a member or ceased to be a member must be delivered to the Registrar within 14 days on the following forms:

If, on appointment, a member is also appointed as a 'designated member', this is stated on Form LLP288a.

Notice that an existing member has changed their name or address must be delivered to the Registrar within 28 days on the following form:

The members may decide at any time to reverse the position by delivering notice to the Registrar on Form LLP8. If the Form LLP8 says that specific members will be designated members, then details of each member's status must be delivered to the Registrar within 28 days on Form LLP288c.

Where specific members are designated members, a member may become a designated member - or vice versa - at any time by agreement with the other members. Again, notice of the member's change of status must be delivered to the Registrar within 28 days on Form LLP288c.

A designated member that ceases to be a member is automatically no longer a designated member.

If, for any reason, the number of designated members falls to one, or none, then all members will be deemed designated members.

5. What responsibilities do the designated members have?

Designated members have the same rights and duties towards the limited liability partnership as any other member. These mutual rights and duties are governed by the limited liability partnership agreement or by law. However, the law also places extra responsibilities on designated members. In particular, designated members are responsible for:

Designated members are also accountable in law for failing to carry out these legal responsibilities.

6. Must a change of registered office address be notified to the Registrar?

Yes. It is vital that you keep us informed of the location of your registered office.

Every limited liability partnership must have a registered office: it is the 'home' of the limited liability partnership to which all official documents, notices and court papers have to be sent by law. The address must be a physical location, not just a post office box. This is because people have the right to visit your office to inspect certain registers and documents, and to deliver documents by hand.

You can change your registered office by sending a completed Form LLP287 to the Registrar. The change becomes legally effective only when we have registered the form.

Section 1.2 Quality of documents

1. What happens to documents sent to Companies House?

The documents and forms you deliver to Companies House are scanned to produce an electronic image. The original documents are then stored, and the electronic image is used as the working document.

When your business contacts view the limited liability partnership's record they see the electronic image reproduced on-line. So it is important not only that the original is legible but that it can also produce a clear copy.

This section lays down a few quality guidelines to follow when preparing a document for filing with the Registrar at Companies House.

2. What happens if my documents do not meet the guidelines?

Companies House can reject documents that cannot be captured electronically, giving a notice saying why they are unacceptable. An acceptable copy must be delivered within 14 days of the notice, otherwise we treat the original as not having been delivered.

3. How should documents be set out?

Every document delivered to the Registrar must state in a prominent position the registered number of the limited liability partnership, and must comply with any requirements specified by the Registrar relating to the layout of that document.

Briefly, documents should be on A4 size, plain white paper between 80gsm and 100gsm in weight with a matt finish. Text should be black, clear, legible, and of uniform density. Letters and numbers must be at least 1.8mm high, with a line width of at least 0.25mm.

Important: coloured ink can drop out (disappear) when a document is scanned to produce an image. To prevent this, always use black ink to complete and sign all documents.

4. What is the most common problem to avoid?

Glossy accounts
If you are producing colour-printed glossy accounts, please save them for your members and others who will appreciate them. We still need black on white with a matt finish. A typed unbound version or printer's proof is ideal, provided it has the necessary signatures.

5. Can I find out more about this?

For further guidance on print requirements, contact 0870 333 3636

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CHAPTER 2

Annual Return

Section 2.1 Completing an annual return

1. 1 Which limited liability partnerships must send an annual return to Companies House?

Every limited liability partnership must deliver an annual return to Companies House within 28 days of its made-up date (see question 3). A limited liability partnership's designated members are responsible for ensuring that the annual return:

2. What is an annual return (Form LLP363)?

An annual return is a snapshot of information at the made-up date (see question 3). It is separate from a limited liability partnership's annual accounts. An annual return must contain the following information:

3. What is the made-up date?

This is the date at which all the information in an annual return must be correct. The made-up date is usually the anniversary of:

4. When must the annual return be delivered to Companies House?

All annual returns must be delivered to Companies House within 28 days of the made-up date given on the form.

5. Completing the annual return Form LLP363

All the details you give on Form LLP363 must confirm the limited liability partnership information already held on the Companies House public record at the made-up date. The details you should give are stated under question 2 of this section. You may only change the details by sending one or more of the following statutory form(s) with the document:

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CHAPTER 3

Accounts and Accounting Reference Dates

Section 3.1 Accounting reference dates

1. What is a financial year?

Every limited liability partnership must prepare annual accounts that report on the financial performance and position of the limited liability partnership during the year. The period reported on in the accounts is called the financial year. This starts on the day after the previous financial year ended or, in the case of a new limited liability partnership, on the day of incorporation.

The accounting reference period ends on the accounting reference date (ARD) - see questions 2 and 3 - or a date up to seven days either side of the ARD, if this is more convenient.

2. How is the ARD fixed?

For a new limited liability partnership, the ARD is set using its date of incorporation - see question 3. You can change the first accounting reference period and subsequent accounting reference periods by changing the ARD - see questions 4 and 5.

3. What period must a limited liability partnership's first accounts cover?

For all new limited liability partnerships, the first accounting reference period is automatically set as the first anniversary of the last day in the month in which the limited liability partnership was incorporated. For example, if the limited liability partnership was incorporated on 10 June 2001 its ARD would be set at 30 June, and the first accounts would cover a period from 10 June 2001 to 30 June 2002 - or up to seven days either side of that date. Although the ARD is set on incorporation, you can change it - see question 4.

4. Can the ARD be changed?

Yes, by completing Form LLP225 and sending it to Companies House. But you have to register the new ARD before the filing deadline of the accounts. In other words, if Companies House is expecting accounts for a particular accounting reference period and they become overdue, it is too late to say that you wanted to change the ARD.

Limited liability partnerships normally have 10 months to send their accounts to Companies House. The period allowed for sending a limited liability partnership's first accounts is calculated differently and this is explained in section 3.2.

5. Are there any restrictions on changing the ARD?

You may change an ARD by shortening an accounting reference period as often as you like and by as many months as you like. However, there are restrictions on extending accounting reference periods:

Section 3.2 Preparing and filing accounts

This section explains the basic rules on preparing and filing accounts. It applies