Invest NI No Nonsense Guide 11 (PDF) - Invest Northern Ireland

Forming a businessCheck for changes in the lawRegulations, figures and sumsof money may have changedsince publicationMembers of a limited liabilitypartnership are protected frompersonal responsibility forbusiness debts.Their liability is limited to theamount of money they haveinvested in the business and toany personal guarantees theyhave given to raise finance.As with a traditionalpartnership, partners in a limitedliability partnership sharemanagement responsibilities andpotentially have more money toinvest in the business.But forming an LLP will bemore expensive and complicatedthan setting up a partnership. Itwill involve sending registrationdocuments to Companies Houseand paying a fee.A limited liability partnershipwill also bring a number of extrarunning costs.For example, you will berequired to make financialinformation about your businesspublicly available by sending acopy of its annual accounts toCompanies House. You will alsohave to submit an annual returngiving key details of the LLP andits members.LLPs also have to have theiraccounts audited, although thosewith a turnover of less than£6.5m and a balance sheet ofless than £3.26m are normallyexempt.As with a traditionalpartnership, it is a good ideafor anyone forming a limitedliability partnership to draw upa partnership agreement settingout how the LLP will be run andhow profits will be shared.Members of limited liability}All I needed to do onceI’d registered as a soletrader was manage acash book, work througha simple profit and lossaccount and complete mytax return~Adam EwartKaracha Music Limitedpartnerships are often taxedas self-employed but this is notalways the case. If you are selfemployed,you must register withHM Revenue & Customs withinthree months of starting up (seeNext steps below).You cannot form an LLP ifyour business will be a charity ornot-for-profit organisation.Next steps● See Employed orself-employed?, page 10● Visit www.nibusinessinfo.co.uk/legalstructures● It is a good idea to seek helpfrom a business adviser orsolicitor when deciding thebest legal form for yourbusiness● If you are self-employedyou must register with HMRevenue & Customs. Contact0845 915 4515;www.hmrc.gov.uk/startingupLimited companyA limited company offersreduced responsibility forbusiness debts. But itbrings a range of extra legalduties, too — such as filingyour accounts with CompaniesHouse each yearPrivate companies limitedby shares generally protectthe individual from personalresponsibility for business debts.Your personal risk is restrictedto how much you invest in the5The No-Nonsense Guide