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Limited Liability Partnership

(9 Posts)
GrandmaH Wed 15-Jan-14 16:04:41

Sending this to Grans & Grandads.
Does anyone know anything about LLP?
My husband is about to go into a self employed role as a contractor having been 'employed' for most of his working life. While looking into setting up a limited company & getting accountants etc he came across this & it sounds too good to be true- which may mean it is!
Does anyone know any pitfalls or good things about it please?

FlicketyB Wed 15-Jan-14 16:14:06

Why is he setting up as a limited company and signing up accountants?

DH went self-employed as a consultant engineer after he retired after a working lifetime as an employee. He kept track of all his income and expenses and just completed a self assessment tax form each year.

The secret, whether just self-employed or using more complicated methods is registering for NI payments and keeping a meticulous documented list of all expenses relating to working as self-employed. The difficult part is disciplining your self to make sure you get receipts and listing and saving them everyday.

Aka Wed 15-Jan-14 16:23:29

With a Limited Company I think if he goes bankrupt things like your private house is not at risk.

whenim64 Wed 15-Jan-14 16:25:16

As a contractor be may be depending on cash flow and incurring debts, or finding he's on the wrong end of someone else's debts, which can cripple a business. LLP puts boundaries around this. My son has it for businesses which he shares, or has association, with other businesses where finances and assets are passing between them. If it's straightforward providing a service for which he gets paid, he doesn't need it.

Gagagran Wed 15-Jan-14 16:41:06

HMRC has a lot of useful leaflets and advice about this. Worth calling your local office and asking.

FlicketyB Wed 15-Jan-14 16:52:48

It depends on whether you are self-employed selling your expertise or self-employed running a business with equipment, premises and overheads. If the former, like DH, he was working from home, selling his skills and there was nothing he did that would run up any business debt let alone business debt that could lead to bankruptcy.

If you are running a business, say setting up a shop where you need premises and stock etc that is a different matter, but I got the impression that GrandmaH was talking about selling skills and expertise rather than setting up a business needing capital.

Anne58 Wed 15-Jan-14 18:14:38

Mr P is a limited company, even though there is only him. He operates on a contractor basis, so I suppose that is similar to what you are referring to in the OP. He does have a company that handle all his accounts, and has a separate bank account for the business. (legal requirement to keep business account separate)

I have just asked him, and he says that for contracting he would not bother with LLP (can be more trouble than it's worth). To set up your own limited company costs less than £20.

If you choose to use an accountancy company, they will usually charge around £150 pm, and they can also set everything up for you. You can of course do it on your own.

If you would like some more info (from Mr P!) feel free to PM me.

GadaboutGran Thu 16-Jan-14 16:22:03

Agree with the above. I've worked as a sole trader (in consultancy & training) for 25 years & kept bureaucracy & formalities to the minimum (& what is needed legally). Mr Gad does the accounts but we have an accountant to check & offer advice. It's often a good way to start while you find your feet. Also find out about courses run by local colleges & Business Enterprise centres ( or whatever they are called now). Just be wary if joining in business with friends & relatives & ensure agreements are watertight, including what happens if there are disagreements or one wants to withdraw. Better to do this at the start - it's worse than divorce if you fall out later. Keep on top of tax & keep back enough money to pay the bill.

GrandmaH Thu 16-Jan-14 19:44:03

Very interesting- thank you all. I will certainly get him to look at HMRC site.
He set up a limited company before seeing this LLP thing but thinks this will be easier. He is going to be working through an agency from what I understand.
We are both very ignorant about these things having both worked for companies although he was SE for a few months some years ago.

I may well PM you once we have discussed it further, Phoenix.

As usual gransnet hss all the answers!