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Formation and Names

Contents

Introduction
1. New limited liability partnerships
2. Choosing a limited liability partnership name
3. Change of limited liability partnership name
4. Sensitive words and expressions
5. Directions to change a limited liability partnership name
6. Publication of limited liability partnership name, and details to be
    shown on limited liability partnership stationery
7. The new limited liability partnership - looking forward
8. Further information
    Appendices
This is a guide only and should be read with the relevant legislation.


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Introduction

This booklet is about requirements for the incorporation of limited liability partnerships. It applies to limited liability partnerships formed and registered in England, Wales and Scotland. It covers the formation documents, limited liability partnership members, and the controls applied to the use of certain limited liability partnership names. This includes:
  • the rules and restrictions on the choice of limited liability partnership names both when a limited liability partnership is formed and when it changes its name;
  • how to change a limited liability partnership name.
  • when Companies House will not register a limited liability partnership name and when the use of sensitive words or expressions will need to be justified or need prior approval from a recognised authority; and
  • when you can object to the registration of a particular limited liability partnership name, and also what to do if your limited liability partnership name has been objected to and you are directed by the Secretary of State to change the name.
All incorporated partnerships must disclose certain information to Companies House for the public record and to the people they deal with. This booklet tells you:
  • where you must display the limited liability partnership name and what information must appear on partnership stationery; and
  • when changes in the limited liability partnership's circumstances and particulars must be notified to Companies House.
This booklet is only intended as an introduction to these continuing obligations. Other booklets in this series are mentioned in the text; they cover individual subjects in more detail.

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. When we refer to 'the regulations' in this booklet, we mean the Limited Liability Partnerships Regulations 2001.

Setting up a limited liability partnership brings many obligations. It may be worthwhile taking advice from a solicitor or accountant as to whether a limited liability partnership is the best way for you to run your business.


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CHAPTER 1

New limited liability partnerships

1. What is a limited liability partnership?

A limited liability partnership is a new form of legal business entity with limited liability.

2. What is the difference between a limited liability partnership and a limited company?

The main difference is that a limited liability partnership has the organisational flexibility of a partnership and is taxed as a partnership. In other respects it is very similar to a company.

3. Who can form a limited liability partnership?

The Act generally allows two or more persons associated for carrying on a lawful business with a view to profit to form a limited liability partnership by subscribing to its incorporation document - Form LLP 2. (In law, 'person' includes individuals and companies.) However, limited liability partnerships are not available for all activities such as non profit making activities.

4. How do I form a limited liability partnership?

You will need to send an Incorporation Document Form LLP2, together with the registration fee (see question 11 below), to the Registrar of Companies.

5. What is an Incorporation Document (Form LLP2)?

The form sets out:
  • the limited liability partnership's name;
  • where the registered office of the limited liability partnership is situated (in England, Wales or Scotland);
  • the address of the registered office;
  • the name, full address and date of birth of each member; and
  • which of these persons are to be designated members or that all members are designated members.
The Form LLP2 includes a statement of compliance that must be signed by a solicitor or a proposed member. Whoever signs the statement must indicate in what capacity they are signing the form. All members and designated members must sign and date the incorporation document to confirm their consent to act.

6. What is a registered office?

It is the address of a limited liability partnership to which Companies House will send letters and reminders. The registered office can be anywhere in England and Wales (or Scotland if your limited liability partnership is registered there). The registered office must always be an effective address for delivering documents to the limited liability partnership, and to avoid delays it is important that all correspondence sent to this address is dealt with promptly. If a limited liability partnership changes its registered office address after incorporation, the new address must be notified to Companies House on Form LLP287.

Valid addresses
Companies House uses the Post Office address file to verify addresses, so to avoid delays, please ensure that your proposed registered office address is recognised by the Post Office and always give the correct postcode on forms sent for registration.


7. What is the minimum number of designated members a limited liability partnership requires?

Every limited liability partnership must have at least two, formally appointed, designated members at all times. If there are fewer than two designated members then every member is deemed to be a designated member. (The limited liability partnership may have decided that all members will be designated members or that only some members will be designated members - see question 5 above).

After incorporation, you must tell Companies House about:
  • the appointment of a new member or designated member - use Form LLP288a;
  • a member or designated member ceasing to act in the limited liability partnership - use Form LLP288b;
  • changes in a member's or designated member's name or address or any of the other details originally registered on Form LLP2 - use Form LLP288c;
  • changes in a member's status (member to designated member or vice versa ) - use Form LLP288c;
  • a reversal of the decision that either all members or only specific members will be designated members - use Form LLP8. (Forms LLP288c, changing the status of each member, may also be required).
8 What is the difference between a member and a designated member?

With the agreement of the other members, a member may become a designated member at any time. 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 and the general law. However, the law also places extra responsibilities on designated members. In particular, designated members are responsible for:
  • appointing an auditor (if one is needed);
  • signing the accounts on behalf of the members;
  • delivering the accounts to the Registrar;
  • notifying the Registrar of any membership changes or change to the registered office address or name of the limited liability partnership;
  • preparing, signing and delivering to the registrar an annual return (Form LLP363); and
  • acting on behalf of the limited liability partnership if it is wound up and dissolved.
Designated members are also accountable in law for failing to carry out these legal responsibilities.

9. What happens to the documents sent to the Registrar?

All limited liability partnership formation documents are subject to certain checks including checks of prospective members against the register of disqualified directors and members.

The Registrar then keeps the documents delivered and makes them available for public inspection.

10. Can I choose any name I want for my limited liability partnership?

No. There are some restrictions on your choice. Chapter 2 of this booklet explains how those restrictions may affect your choice.

Limited liability partnership name checks

It is important to check that the name you want is acceptable to Companies House before you complete the incorporation document (Form LLP2).

Briefly, the restrictions are that:
  • you cannot register the same name as another limited liability partnership or company;
  • the use of certain words is restricted; and
  • names likely to cause offence are not allowed.
It is also important to check whether your chosen name is similar to any other names already on the register.
If you have Internet access, you can view the register of names on our web site at www.companieshouse.gov.uk. If your chosen name is too like another name, an objection could be made within the 12 months following the incorporation of your limited liability partnership and you could be directed by the Secretary of State to change the limited liability partnership's name.


11. How much does Companies House charge to incorporate a limited liability partnership?

The registration fee is £95. Cheques should be made payable to Companies House.

12. Where can I obtain a form to incorporate a partnership?

Form LLP2 is available on our web site at www.companieshouse.gov.uk or from the Companies House offices listed at the end of this booklet. The form can also be obtained from legal stationers, accountants, solicitors or formation agents. Their names and addresses are available in business phone books.

13. Can I deal direct with Companies House to form my limited liability partnership?

Yes. However, while our staff will be happy to give you guidance on general matters (such as filling in forms or advice on limited liability partnership names), they cannot advise you whether an incorporated limited liability partnership is the best vehicle for your business.

If you are unsure about any aspect of forming a limited liability partnership, please seek professional advice from your solicitor, accountant or formation agent.

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CHAPTER 2

Choosing a limited liability partnership name

1. Can I choose any name I want for my limited liability partnership?

No. Several regulations can affect your choice. For example, all limited liability partnership names must end with the words 'Limited Liability Partnership', or, their abbreviations or Welsh equivalents 'Partneriaeth Atebolrwydd Cyfyngedig'.

2. Could my choice of name be rejected?

Yes, if:
  • it is 'the same as' a name already on the index - see question 3 below;
  • it includes the words 'limited liability partnership' anywhere except at the end of the name. This applies equally to abbreviations or the Welsh equivalent of  the words;
  • it is offensive;
  • its use would be a criminal offence.
In addition, some names need the approval of the Secretary of State before they can be registered. These include names which contain words prescribed by regulations (see question 4) and names which suggest a connection with central or local government.

If you avoid these restrictions, you can normally have your choice of name.

Make sure that the name you want to use is acceptable before you complete your incorporation document - Form LLP2 - or complete Form LLP3 to change a limited liability partnership name. If in doubt, contact:

For limited liability partnerships registered in England and Wales

0870 3333636		 For limited liability partnerships registered in Scotland

0131 535 5831 or 5832


3. What does 'the same as' mean?

When deciding whether a name is 'the same as' another name, the Registrar ignores punctuation, the limited liability partnership status and 'the' at the start of the name. A name that sounds the same as one already on the Company or Limited Liability Partnership Names Index may be accepted if the two names are spelt differently.

For example, if the name 'Hands Limited' is already registered, then the following would be rejected:
  • Hands Limited Liability Partnership (or LLP)
  • H and S Limited Liability Partnership (or LLP)
  • H & S Limited Liability Partnership (or LLP)
While a limited liability partnership name may be sufficiently different from a name already on the Index to allow it to be registered, this might not be enough to avoid the name being considered 'too like' another if an objection is lodged after the second limited liability partnership or company has been incorporated. In such cases, your partnership could be directed to change its name - see chapter 5.


You should be aware that if you adopt a name which misleads the public into believing that your business is that of another business - for example, trading as a department store under the name 'Harrods' - then you may face a legal action for 'passing off' by the person whose business you have affected. Registration of a name by Companies House is no guarantee that you are safe from such an action.

Registering a name prevents another limited liability partnership from having an identical name, but it does not stop the name being used as a trading or business name except in the circumstances described above.


4. Which names need approval?

Names which need approval are those which include words or expressions set out in statutory regulations and names which give the impression that the limited liability partnership is connected with HM Government or with a local authority. Full lists of 'sensitive' words are at Appendices A, B and C, and there is more information on sensitive words in chapter 4.


Names that suggest a banking activity

Following the repeal of the Banking Act 1987, company names that include bank, banker, banking or deposit no longer need approval. However, using words that suggest a banking activity implies that the person using the name is carrying on a banking business and is therefore accepting deposits - a regulated activity under the Financial Services and Markets Act 2000. Therefore, the person would normally need to be an 'authorised person' or to have exemption under the Act.

Use of a banking name by a person who is neither authorised nor exempt under the Act could be material to whether an offence has been committed under section 24 of the Act. A person may, however, be able to establish that the way that he carries on his business means that those who deal with him would not understand him to be an authorised person.

It should not be assumed that a decision by us to register a particular banking name means that its use in certain circumstances would not contravene section 24. If you are in any doubt, you should seek independent legal advice.



5. What if my choice of name needs approval?

If you choose a limited liability partnership name that needs the approval of the Secretary of State for Trade and Industry, then before committing yourself, contact the Limited Liability Partnerships Team at Companies House, Cardiff or Edinburgh, as appropriate, and ask for information on the rules governing the use of the word you have chosen.
  • If you choose a name that includes any of the words listed in Appendix A, you will probably be asked to supply supporting information before we register the name. You should write, enclosing information in support of your application, to the Secretary of State for Trade and Industry at Companies House in Cardiff (for English and Welsh limited liability partnerships) or in Edinburgh (for Scottish limited liability partnerships). Both addresses are at the back of this booklet.
  • If your choice of name includes any of the words listed in Appendix B, then you will need to write to the 'relevant body' to ask if they have any objection (and if so, why) to your use of the word or expression in your limited liability partnership name. When you write to the Secretary of State for Trade and Industry at Companies House, Cardiff or Edinburgh to ask for approval of the name, you must enclose a copy of any reply you have received from the 'relevant body'.
  • The use of some words and expressions is covered by other legislation and their incorrect use in limited liability partnership names might be a criminal offence. Those known to Companies House are listed at Appendix C. If you wish to include one of these words or expressions in your limited liability partnership name, then you should contact the relevant regulatory authority, or ask us for advice.