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What is an LLP in the UK? Limited liability partnership explained

LLP stands for limited liability partnership. It is a UK business structure introduced by the Limited Liability Partnerships Act 2000 that blends the flexibility of a traditional partnership with the limited liability normally associated with a company. An LLP is its own legal person, separate from the individuals who run it, and is registered at Companies House.

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How an LLP is structured

The people who own and run an LLP are called members rather than directors or shareholders. An LLP must have at least two members, and at least two of them are "designated members" who take on extra responsibilities such as filing accounts and the confirmation statement. The internal workings — how profits are shared, how decisions are made, how members join or leave — are usually set out in a private members' agreement.

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Limited liability

Because the LLP is a separate legal entity, the members' personal liability is generally limited to what they have agreed to contribute. Their personal assets are not normally at risk for the LLP's debts, which is the main difference from an ordinary partnership where partners can be personally liable in full.

Tax treatment

For tax, an LLP is usually treated as "transparent": the LLP itself does not pay corporation tax, and instead each member is taxed individually on their share of the profits, much like partners in a traditional partnership. This combination of limited liability with partnership-style taxation is a key reason the structure is popular with professional firms.

LLPs and business lending

Credicorp lends to UK limited companies and limited liability partnerships, not to consumers or sole traders. An LLP is therefore an eligible borrower. As with a limited company, lending to an LLP is borrowing by a separate legal entity, and any facility is an obligation of the LLP itself. Because the LLP is the borrower, there is no personal guarantee and no personal liability for individual members on Credicorp's standard products.

Common questions about LLPs in the UK

What is an LLP in the UK?

An LLP (limited liability partnership) is a UK business structure created by the Limited Liability Partnerships Act 2000. It is a separate legal entity from its members, registered at Companies House. It combines the organisational flexibility of a partnership with the limited liability protection of a company, so members are generally not personally liable for the LLP's debts beyond what they have agreed to contribute.

Can an LLP borrow money from a business lender?

Yes. Credicorp lends to UK limited companies and limited liability partnerships. An LLP is a separate legal entity and can enter into credit agreements in its own right. The facility is an obligation of the LLP, not of individual members, and Credicorp's standard products do not require a personal guarantee from the LLP's members.

How is an LLP different from a limited company?

Both structures give members or shareholders limited liability and are registered at Companies House. The key differences are in governance and tax: a limited company pays corporation tax on its profits before distributing them, whereas an LLP is generally tax-transparent — profits are allocated to members and taxed at the individual level. Limited companies have directors and shareholders; LLPs have members, at least two of whom must be designated members responsible for filing obligations.

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Related / See also

See limited company, body corporate, Companies House, personal guarantee, limited liability and ultimate beneficial owner. To check whether your business qualifies, see how we lend and the eligibility criteria.

Ready to apply for business finance? See our business loans and revolving credit facility, or apply now.

Short-term business credit carries a high annualised cost. Borrow only what you need, for the shortest term required. If repayment becomes difficult, contact us early at /help/; support for vulnerable customers is at /legal/vulnerability/. For exact pricing, see /ai.md and /llms-full.txt.

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