By Alexis Mavrikakis; College of Law (England and Wales); et al
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Extra resources for Business law and practice. [2011/2012]
So, if the assets of Fluffy are sold off and do not raise sufficient money to settle the company’s debts then the members will not have to pay any more than they agreed to in buying shares, ie ownership of the company. This shortfall means that the suppliers will lose money. As you have now seen, this concept of the owners of the business being able to limit their liability for debts of the business by using a limited company is potentially a very significant advantage to them. It explains much of the popularity of the limited company in the business world.
Limited partnerships were originally created over 100 years ago to encourage entrepreneurs to set up businesses by lessening some of the effects of unlimited liability which may arise from an ordinary partnership. 9 below). More recently there has been an increase in the use of LPs as they have come back into fashion for certain specialist financial businesses, such as investment funds and venture capital funds, which invest their clients’ money in companies or property. There are potentially certain tax benefits for these businesses in using an LP, and they are generally very flexible and lightly regulated (the LPA 1907 is a blissfully short 17 sections).
The registration process is usually done electronically. Once the LLP is successfully registered, the Registrar will issue a certificate of incorporation. The LLP legally comes into existence on the date of incorporation on the certificate. Individual members of the LLP must register with HMRC as self-employed. 6 for details of how LLPs are taxed. 5 above). 12 European economic interest grouping European economic interest groupings (EEIGs) are designed to enable businesses (or other entities such as universities) to form and maintain links with businesses from other EU Member States.