LLP, Corporate Partner

LLP, Corporate Partner

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OK.  this is new to me and I'd appreciate your comments:

Client currently has Ltd Co. (1 shareholder/director)

Client wants to set up LLP with Ltd co as a partner.

LLP will take over the sales side of business & have flexibility to introduce new partners

Ltd co will retain the costs.

Ltd Co will receive a profit distribution from LLP to cover costs.

Ltd is currently VAT registered.  Going forward the Ltd co will have no taxable turnover.  Presumably it will have to deregister for VAT.  Is this right?  Ltd co will be unable to reclaim input tax on all of the costs.

Could Ltd just charge a management fee instead of taking a profit distribution from the LLP.  If Ltd co receives a profit distribution, where does this show on the accounts?

Any other issues i need to consider with this set up?

Thanks again

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