Limited & Liability Partnership
Your liability for business debt differs depending on whether you’re a limited partnership or limited liability partnership (LLP).
You can share all the business’s profits between the partners. Each partner pays tax on their share of the profits.
The liability for debts that can’t be paid in a limited partnership is split among partners.
Partners’ responsibilities differ as:
- ‘general’ partners can be personally liable for all the partnerships’ debts
- ‘limited’ partners are only liable up to the amount they initially invest in the business
General partners are also responsible for managing the business.
Read more about how to set up and run a limited partnership.
Limited liability partnerships (LLPs)
The partners in an LLP aren’t personally liable for debts the business can’t pay - their liability is limited to the amount of money they invest in the business.
Partners’ responsibilities and share of the profits are set out in an LLP agreement. ‘Designated members’ have extra responsibilities.