Conversion of an LLP to a Limited Company

Conversion of an LLP to a Limited Company

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I have just taken on a new client. This is a company with a clever new idea but to develop this idea it will need investment.

The business owners are keen on the Enterprise Investment Scheme. No problem I say to them at our first meeting.

However, only later, when I collect all the business data from the client, do I discover that they have been operating the business as an LLP, not a Limited Company.

Is there a formal way I can transfer an LLP to a Limited Company or do I have to set up the Limited Company, transfer the assets of the LLP to the Limited Company and then wind up the LLP? I've looked at the Companies Act but i cannot see that there is a formal process to go through.

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Stepurhan
By stepurhan
26th Mar 2011 17:22

Is EIS their best route?

Since agreement between members can largely be varied according to need, does the LLP not give them more flexibility when it comes to seeking investors? Granted EIS does require them to be a company (since it relies on shares to operate) but going through the administrative change just to get EIS seems unnecessary.

You also need to consider why the client set up as an LLP in the first place. It seems unlikely they just did it on a whim so they may have good reasons for not setting up as a company. If your plan to change them over is solely as a result of receiving their basic business information, then you need to consult with them first.

You can't just convert an LLP to a limited company, which is what you seem to be asking. They are entirely separate corporate entities and some form of transfer is likely to be necessary if you want to move the whole business across.

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