HOW TO FORM A SCOTTISH LLP?|company formation Scotland|Scotland company formation|Business in Scotland|Accounting work Scotland|Online work UK,London,Watford

HOW TO FORM A SCOTTISH LLP?

Like a general partnership, Limited liability partnership must consist of two or more partners who carryon business with a view to profit. Scottish LLP is a unique vehicle. It has been used in the recent times for private equity and property investment fund structures. The Scottish LLP can be a main funds vehicle because: it can hold assets in its own name; there can be multiple but passive investors (the limited partners); only one person manages the investments and business of the partnership (the general partner).

1.      Requirements:

·         At least one general partner.

·         One limited partner.

·         LLP Agreement: A limited liability partnership agreement sets out the details of the LLP, its members, their profit shares, capital contributions and, most crucially, the rules for leaving the LLP.

·         Management functions are only for general partner.

·         Limited partners are liable only to the extent of their capital contribution.

2.      Advantages: 

·         Separate legal entity: it can own its own assets, enter in to contracts, sue or be sued, own property, borrow money and grant certain types of security.

·         Tax transparency: no tax is payable by Scottish LLP itself. Instead UK tax authorities will look through the partnership structure and partners are taxed on their profit sharing ratio.

·         Limited management participation: management and control rests with general partner or manager appointed by the general partner.

3.      Cost: cost forming Scottish LLP is £60.

4.      Can non-UK resident be a partner in Scottish LLP?

·         Yes, a non- UK resident can be a partner in Scottish LLP.

·         The tax rate for a company will depend on the residence of a partner.

·         If your partner is a resident of UK then he or she will have to pay tax on their shares of profits in UK.

·         If the partners are not residents in UK and do not conduct any business in the country, they will not pay any tax in UK only at their own jurisdiction.

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