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LLP Tax Return

LLP Tax Return

Got an LLP client, originally 2 partners but one left and has not been replaced. On the basis that an LLP is a separate legal entity I completed Partnership Tax Returns for the years in which there was only one partner. These have now been returned by HMRC as business is effectively a sole trader. I had been under the impression that because it was an LLP a Partnership Return had to be submitted regardless of the number of partners. As I understand it there is nothing to stop an LLP having only one member - the major effect is that after a period it loses it's limited liability. All comments gratefully received.


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20th Dec 2012 17:06

As you say, a limited liability partnership must have at least two members. If membership falls to only one member and the limited liability partnership continues to carry on business for more than 6 months, then the benefits of limited liability are lost.


I think that HMRC's argument will be that if there is only one person, there can be no partnership, and therefore sole trader status will apply.

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20th Dec 2012 21:04

How to solve
Register a dormant Ltd with your client as sole director and shareholder. Appoint the ltd as a member. Make the client the designated member with 100% profit share. Job done

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