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LLPs were created by the Limited LiabilityPartnerships Act 2000, which has been heavilyamended by various statutory instruments.Certain provisions of the 2006 Act apply toLLPs by virtue of the Limited LiabilityPartnerships (Application of Companies Act2006) Regulations 2009, which came into forceon 1 October 2009.The key features of LLPs are:• They are corporate bodies with legalpersonalities which are separate fromthose of their members.• They have unlimited capacity and, like acompany, can therefore do anything thata natural person can do, for exampleown property or be a party to litigation.• Their members have limited liability (butsee ‘Insolvency of an LLP’ below).• They are taxed in the same way as apartnership i.e. the members of the LLPare taxed individually on their drawings(See the section entitled ‘the TaxSystem’ at pages 10-15).• There is no upper limit on the number ofmembers LLPs can have, however theymust have at least two.• Accounting and filing requirements arebroadly similar to those of a company.1. Incorporating an LLPAn LLP is incorporated by filling the requiredapplication form along with a fee (£40, or £14 ifelectronically filed, at the time of writing) withthe Registrar of Companies at CompaniesHouse. The application must be signed by allof the founding members of the LLP,confirming their consent to act.The application also includes a statementwhich must be signed by a proposed memberor a solicitor who has been involved with theformation of the LLP, stating that the personsnamed in the form are ‘associated for carryingon a lawful business with a view to profit’ as anLLP cannot be formed for non-profit makingactivities.2. Management of an LLPLLPs do not have directors in the same way asa company (see below), and members are freeto order themselves as they wish, which isusually done by way of contractual agreementamongst themselves. LLP Agreements areconfidential to the LLP members, unlike acompany’s Articles of Association, which mustbe filed at Companies House.However, a LLP must have at least two‘designated members’ who are responsible forvarious administrative matters such as filingaccounts and the annual return at CompaniesHouse. The identity of the designatedmembers must be provided on incorporationbut can be changed at any time. If nodesignated member is specified all membersof the LLP are deemed to be designatedmembers.Failure of a designated member to comply withtheir duties is a criminal offence.3. Insolvency of an LLPBroadly speaking, the position on theinsolvency of an LLP is similar to that on theinsolvency of a company. There is however anotable difference, which is that any amountsdrawn by a member in the two years beforethe commencement of a winding up can be‘clawed back’ if the member knew that aftermaking the drawing there was no reasonableprospect of the LLP being able to avoidinsolvent liquidation.4. Companies incorporated inEngland and Wales1. FormationAny one or more persons may incorporate acompany in England and Wales by subscribingto a memorandum of association(“Memorandum of Association”), provided thatthe business is for a lawful purpose andotherwise complies with the requirements ofthe 2006 Act regarding registration and form ofincorporation.The most common type of companyincorporated in England and Wales is acompany limited by shares; with suchcompanies the liability of the shareholders islimited (generally) to the amount of the issuedshare capital. It is also possible to formcompanies “limited by guarantee” (which areinvariably not-for-profit companies) and“unlimited” companies where the liability ofshareholders is unlimited, but which at thesame time do not generally need to submitaccounts which are available for publicinspection. The remainder of this section isconcerned with companies limited by sharesPAGE 5