Conversions: LLP to Ltd by shares
Limited liability partnership (LLP) to company limited by shares
There is no statutory procedure for re-registering a limited liability partnership (LLP) as a company limited by shares. It is not possible to to convert the same corporate entity from one type to the other. It is possible, however, to create a new limited company under the same name and then to transfer the undertaking and assets from the 'old' LLP to the new limited company. The new company will be a separate legal entity, with a different company number from the previously existing LLP. It will need a new VAT registration and existing long-term contracts, such as leases, bank arrangements, etc. will have to be renewed or assigned.
The procedure would be:
- change the name of the existing LLP so that it may be used for the new company
- register the limited company
- the new limited company and the LLP approve a contract between them under which all or some of the assets and all or some of the liabilities are transferred from the former to the latter. Care must be taken with this as the contract will be a substantial property transaction in which all the directors of the limited company are interested. See directors' conflicts of interest for more information
From an accounting point of view the most convenient date for the transfer will usually be at the end of the existing company's financial year so that accounts can be drawn up for whole years.
Tax warning
Changing from an LLP to a limited company will have tax consequences both in respect of the transfer and the way the business is taxed in the future. We cannot give tax advice and we strongly recommend that this course is not undertaken without proper accountancy advice.
Our service
The Company Law Solutions service will include:
- guidance as to the applicable procedures and requirements
- dealing with the change of name for the existing LLP
- registration of the new company
- drawing up the contract
- all procedures for it to be approved by directors and members of the company and the members of the LLP
- dissolution of the LLP (if required)
- our straightforward, step by step guide to completing the procedures
- checking by us when the documents are completed and registration at Companies House (if required)
Costs
Most conversions of this type will be covered by our benchmark price for this service. Please see our prices guide. The registration of the company will include our standard articles of association, but special articles may need to be drafted. If any special requirements are provided there may be additional costs.