The business combination of running an LLP and company structure is ideal for trading companies and professional practices.

This is a freeview 'At a glance' guide to business combinations. 

Popular business combinations in use in the UK currently include:

  • A company plus service Limited Liability Partnership (LLP).
  • An LLP plus a service company.
  • An LLP with corporate partners.

If a company is paying, or expecting to pay in future, a combination of tax at marginal rates of Corporation Tax and also incurring Employers National Insurance on salaries and bonuses, it may be time to consider the advantages of setting up an LLP. Before 2023, this consideration might have been less relevant, as all companies were subject to the same Corporation Tax rate from 2015 until 2023. With the reintroduction of marginal rates in 2023, it may be worth revisiting this option.

Conversely, where partners are paying higher rate tax, a company run alongside an existing LLP is useful as a 'money box' and can shelter partners from top rates of tax.

A further combination is combining a corporate partner(s) with an LLP.

There are numerous advantages of using an LLP/company or company/LLP combination. This makes it extremely flexible but there are also substantial pitfalls. Which structure is right for the client depends on the individual circumstances.

Introducing our subscribers’ guide:

Running an LLP in tandem with a company
It is possible to run a Limited Liability Partnership (LLP) or another form of partnership in tandem with a company. Partnerships can also have corporate partners. What needs to be considered?

This guide summarises the key issues for advisers and shows how to get started. It considers the advantages, pulling together case law to illustrate some of the potential pitfalls for tax: loans, benefits and associated companies, company law and ultra vires transactions.

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