Partnerships

PARTNERSHIPS may have made good sense for Dickensian England, but they had outlived their usefulness for all but a few businesses by 2000 when the Government introduced Limited Liability Partnerships (LLP).

The LLP, prominent in the US, has scarcely taken UK business by storm - the latest figures show there were 355 limited companies for every LLP.

"But the LLP is coming up on the inside track," says Nick Barwood, who is Bond Pearce's leading expert on the LLP.

"It can be especially attractive as a corporate vehicle. Although the accounts need to be filed with Companies House, the LLP does give limited liability to its members.

"And it's a more flexible vehicle than a limited company. For example, its tax treatment is more akin to a partnership and that in many ways is more attractive than for a limited company/employee type arrangement.

"And you can agree pretty much what you want to do in a LLP without reference to others, like shareholders. It's widely used in the US and I think the take up of LLPs in Britain is still very low because they are still comparatively new and unfamiliar."

The use of partnerships is now being confined to doctors and more sophisticated "joint ventures" between other corporate bodies.

Their use is often driven by complicated tax planning or to ensure confidentiality of the financial information - unlike LLPs or limited companies, partnerships are not required to publish accounts.