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Life of a Limited Liability Partnership - GPLLP2August 2013 - Version 4.2 as modified by the Companies Act 2006 PDF version of this page (211KB) Is this guidance for you? This guide will be relevant to you if:
Overview This guide will tell you what information you have to deliver to Companies House for your limited liability partnership (LLP) to remain on the public register once it has been incorporated. If you wish to change the name of an existing LLP, please see our guide Limited Liability Partnerships Incorporation and Names. This guide applies to all LLPs registered in the United Kingdom (UK) i.e. England, Wales, Scotland and Northern Ireland. ContentsIntroduction This guide answers many frequently asked questions and provides information on completing the most commonly used filings relating to this area. The guide is not drafted with unusual or complex transactions in mind. Specialist professional advice may be needed in those circumstances. The main legislation that applies to limited liability partnerships is:
Companies House IntroductionThis guide will not cover every event that will come along during the life of your LLP. However, it will give you a good idea of your responsibilities and explain the filing requirements at Companies House during the life of your LLP. If you fail to file your LLP's annual documents, i.e. annual return and accounts, the registrar may assume that the LLP is no longer carrying on business or in operation and take steps to strike it from the register. If the registrar strikes an LLP off the register, it ceases to exist and its assets become Crown property. However where an LLP is in operation, the designated members could be prosecuted because they are personally responsible for ensuring that they submit the LLP's annual documents on time. Failing to do so is a criminal offence. In addition, there is an automatic civil penalty for submitting accounts late. By complying with your annual requirements and keeping your LLP public record up to date with the changes within your LLP you will avoid any action against the LLP or its members and it will give searchers an up to date picture of your LLP. Chapters 1 - 3 cover the information you have to deliver to Companies House when particular changes occur within your LLP. Chapter 4 covers the requirement to submit an annual return. Chapters 5 - 12 cover how you can change your accounting reference date, what type of accounts an LLP may prepare and the filing requirements at Companies House. Chapter 13 briefly explains the role of an auditor and outlines the circumstances when LLPs need not appoint an auditor. Chapter 14 covers charge registration. Chapters 15 - 16 give you some useful information about how to deliver the required documents to Companies House and point out some of the general quality requirements that all documents must meet. This guide does not contain information on how to change an existing LLP's name due to certain restrictions that are placed on LLP names. Further information on changing the LLP name, is in our guide on 'Limited Liability Partnerships Incorporation and Names'. If, after reading this guide, you are in doubt about your responsibilities, you should consider seeking professional advice from a solicitor or accountant. Chapter 1 - Members and designated membersThe difference between a member and a designated member and the responsibilities of the LLP's members is covered in our guide on 'Limited Liability Partnerships Incorporation and Names'. 1. What happens when there is a change in the members? The LLP must keep registers that contain details of all its members. They are:
These registers will be kept from the incorporation of your LLP or if your LLP was incorporated prior to 1 October 2009 from that date. Whenever there is a change to a member's details, or the LLP appoints or terminates the appointment of a member, it must update these registers. The LLP must then submit the appropriate form at Companies House within 14 days of the change. The appropriate forms are:
You can notify Companies House of this change online via WebFiling; using a suitable Software Filing package or by delivering paper documents to us by post. 2. What is the difference between a service address and a usual residential address? A service address is one that can be used by a member to receive communications from third parties about the partnership. The service address can be the same as the member's residential address, or the registered office address of the LLP, or it can be somewhere different. A residential address is the usual home address of the LLP Member concerned. It still has to be filed with the Registrar but it will not be available on the public record for everyone to see and will be held on a private register only available to predetermined organisations. 3. What is the difference between the register of members and the register of members' residential addresses? The register of members contains for each member who is an individual:
For members that are corporate members or firms, the register of members will include:
The register of members' residential addresses contains the usual residential addresses of every member who is an individual. (Provided that a member's service address is not the LLP's registered office, then the entry may be to the effect that the usual residential address is the same as the service address). The register of members must be kept available for inspection; the information on the register of members' residential addresses must not be revealed. The LLP can only use the information in this register to communicate with the member and to deliver information to Companies House to update the records held there. The LLP cannot use this information for any other purpose unless so required by the court. 4. What happens to the residential address supplied to Companies House? Residential addresses will not appear on the public record as long as you only provide them in the correct part of the appointment or change of details forms. For paper forms this will be on a separate page, for electronic filings this will be shown in additional address fields. Companies House will only provide residential address information to Credit Reference Agencies and Specified Public Authorities. Further information is in our guide on 'Restricting the disclosure of your address if you are at serious risk'. 5. Can I change the status of whether all the members of the LLP are designated or only specified members are designated? You may amend the position at any time. If you selected that all members were to be designated on incorporation, or at a later date, but now wish only specified members to be designated you need to notify Companies House of the change on LL DE01. If you selected that only specified members were to be designated on incorporation, or at a later date, but now wish all the members to be designated you need to notify Companies House of the change on LL DE01. This will need to be accompanied by a change of member's details on LL CH01 or LL CH02 for any member that is not already a designated member. That member will need to signify their consent to being a designated member. A designated member who ceases to be a member is automatically no longer a designated member. If, for any reason, the number of designated members falls to one, or none, the law will deem that all members are designated members. However, this does not eliminate your filing requirements at Companies House. You can notify Companies House of this change online via WebFiling; using a suitable Software Filing package or by delivering paper documents to us by post. Proof is the registrar's PROOF (PROtected On-line Filing) Scheme. It provides additional security relating to the delivery of members details and registered office address for documents delivered electronically: Chapter 2 - Registered Office1. How do I change my registered office? If your LLP wishes to change its registered office address, you must notify Companies House of the new address on LL AD01. Please note that your new registered office will not take effect until we have entered it onto our database. Companies House uses the Post Office address database to verify addresses. To avoid delays please ensure you are using the correct address including full post code on all forms and documents sent for registration. Please remember that your registered office address must be in the same part of the United Kingdom as where the LLP was incorporated e.g. an LLP registered in England and Wales must have its registered office in England and Wales, not in Scotland or Northern Ireland. You can notify Companies House of this change online via WebFiling; using a suitable Software Filing package or by delivering paper documents to us by post. Chapter 3 - LLP records1. What LLP records do I need to make available for inspection? An LLP must keep and maintain a register of members. If the LLP issues debentures it must keep a register of debenture holders and if it enters into a charge it must keep a register of charges together with the instrument creating the charge. All these registers must also be kept available for inspection. Additionally an LLP must maintain a register of members' residential addresses but this is not available for public inspection. This is covered in Chapter 1 question 2. 2. Where can I keep these records? You may keep all or any of these records at the LLP's registered office. The LLP may choose an alternative location to make these records available for inspection. The LLP can only have one alternative location to the registered office at any given time. That location must be in the same part of the UK as the registered office, e.g. an LLP registered in England and Wales can have an alternative inspection location in England and Wales, but not in Scotland or Northern Ireland. The LLP may choose to keep some records at its registered office and some at its alternative inspection location provided that all the records of a type are kept together. 3. What do I need to deliver to Companies House? If you do not keep all your records at the LLP's registered office, then you need to tell us the address of your alternative inspection location or any change in that address on LL AD02. You also need to tell us which records you hold there, on LL AD03, and when any of the records return to the registered office, on LL AD04. You can notify Companies House of this change online via WebFiling; using a suitable Software Filing package or by delivering paper documents to us by post. Chapter 4 - Annual Return1. Which LLPs must send an annual return to Companies House? Every LLP must deliver an annual return to Companies House within 28 days of its made-up date. An LLP's designated members are responsible for ensuring that:
If you do not deliver an annual return the registrar may assume that your LLP is no longer in business or operation and take steps to strike it off the register. Remember: It is a criminal offence not to deliver the annual return within 28 days of the made-up date, for which the LLP and designated members may be prosecuted. An annual return is a snapshot of information at the made-up date. It is separate from the LLP annual accounts. An annual return must contain the following information:
This is the date at which all the information in an annual return must be correct. The made-up date is usually the anniversary of:
4. Can I change the made up date of my annual return? Yes, you can change it to a date earlier than the expected made up date but not a later date. If you choose an earlier made up date the return must be received within 28 days of that date. You can check the date Companies House expects your annual return made up to by using the WebCHeck service on our website. 5. Completing the annual return - Form LL AR01 All the details you give on the annual return must confirm the details already held on the Companies House public record at the made-up date. You may not use the annual return to change any details on the public record. To change these details you must deliver the relevant form(s) with your annual return.
Companies House will reject your annual return if it does not include the required information. However, where the information is completed but does not match our records, we may choose to accept the annual return but mark it as inconsistent with the public register. For further information, please see our guide on the Registrar's Rules and Powers. 6. Is there a fee for filing the annual return? Yes. There is an annual document-processing fee of £13 for users of our Software Filing or WebFiling services or £40 for paper documents which is payable when you file the annual return. Companies that file a paper annual return should make the cheque payable to 'Companies House' and write the company number on the reverse. 7. Is there any other information that can be filed together with the annual return? Some LLPs must deliver information about their related undertakings with their annual return. This is only where the information required in the accounts would result in excessive notes to the accounts. The accounts must state that the full information will be delivered with the next annual return. Companies House Chapter 5 - Accounting reference dates1. What is a financial year? A financial year is usually a 12 month period for which you prepare accounts. Every LLP must prepare accounts that report on the performance and activities of the LLP during the financial year. This starts on the day after the previous financial year ended or, in the case of a new LLP, on the day of incorporation. Financial years are determined by reference to an accounting reference period. The accounting reference period ends on the accounting reference date. LLPs have the choice to make up their accounts up to the accounting reference date or a date up to seven days either side of it without filing an LL AA01 form, if this is more convenient. 2. How is the accounting reference date determined? For all new LLPs, the legislation sets the first accounting reference date as the last day in the month in which the LLP's first anniversary falls. The subsequent accounting reference dates will automatically be on the same date each year. For example, an LLP incorporated on 1 October 2009 will have its first accounting reference date as 31 October 2010 and 31 October for every year thereafter. 3. Can I change the accounting reference date? Yes, you can change the current or the immediately previous accounting reference date by extending or shortening the period. To do this you must notify Companies House of a change of accounting reference date on LL AA01. You must submit an acceptable change of accounting reference date form before the filing deadline of the accounts for the period that you wish to change. In other words, if accounts for a particular accounting reference period become overdue, it is too late to change the accounting reference date. LLPs normally have 9 months to submit their accounts to Companies House after the end of each accounting reference period. The period allowed for submitting an LLP's first accounts and for changing its accounting reference date is different and we explain this in Chapter 8. 4. Are there any restrictions on changing the accounting reference date? You may change an accounting reference date by shortening an accounting reference period as often as you like and by as many months as you like. However, there are restrictions on extending accounting reference periods:
List of countries within the European Economic Area 5. Are there any extra restrictions when changing an LLP's first accounting reference date? No. The restrictions for changing any period are the same as those described in the previous question. You should note that when you extend your first accounting period to the maximum 18 months, you must count the date of incorporation as the first day of the period. Many LLPs make the mistake of simply adding 6 months to the end of the period, which can in some cases extend the period beyond 18 months. You can notify Companies House of this change online via WebFiling; using a suitable Software Filing package or by delivering paper documents to us by post. Chapter 6 - Accounting records1. Do all LLPs have to keep accounting records? Yes, all LLPs have to keep accounting records which enable the members to prepare accounts that comply with the requirements of the legislation. 2. What must accounting records include? Accounting records must in particular contain:
Also, where the LLP's business involves dealing in goods the records must contain:
A parent LLP must take reasonable steps to ensure that any subsidiary undertaking keeps sufficient accounting records so that the members of the parent LLP are able to prepare accounts that comply with the requirements of the Companies Act, including where the accounts are prepared using International Accounting Standards (IAS). 3. Where must an LLP keep its accounting records? An LLP must keep its accounting records at its registered office address or a place that the members think suitable. The records must be open to inspection by the LLP members at all times. If the LLP holds the records at a place outside of the UK, it must send accounts and returns with details of the business dealt with in the accounting records at least every six months and keep them in the UK. Those accounts and returns must disclose the financial position and enable the members to prepare accounts that comply with the requirements of the Companies Act, including where accounts are prepared using International Accounting Standards (IAS). 4. How long must a LLP keep its records? An LLP must keep its accounting records for 3 years from the date they were made. Chapter 7 - Accounts for the members1. Who is responsible for preparing accounts? The members of every LLP must prepare accounts for each of its financial years. These are individual accounts. A parent LLP must also prepare group accounts (but for parent LLPs defined as small this is optional). Chapter 9 contains more information on small LLPs. A dormant subsidiary may be able to claim exemption from the preparation or filing of its accounts under certain circumstances - see chapter 11. 2. What does a set of accounts include? Generally, accounts must include:
And accounts must be accompanied by an auditor's report stating the name of the auditor and signed and dated by him (unless the LLP is exempt from audit). 3. What period must the accounts cover? An LLP's first accounts cover the period starting on the date of incorporation, not the first day of trading. They end on the accounting reference date or up to 7 days either side of that date. Subsequent accounts start on the day after the previous accounts ended and finish on the accounting reference date, or up to 7 days either side of it. We explain accounting reference dates and how to change them in chapter 5. 4. Who must be sent a copy of the accounts? Every LLP must send a copy of its annual accounts and auditor's report (where applicable) for each financial year to:
The LLP must also send the accounts to Companies House. Further information on this is in Chapter 8. This will not apply to certain dormant subsidiaries that are exempt from preparing accounts - refer to chapter 11 for more information. 5. Can an LLP agree to use a website as a means of showing the members the accounts? Yes. Members may agree internally that an LLP may send or supply documents, including accounts, by publishing them on their website. 6. Who can approve and sign accounts? The LLP members must approve the accounts and have them signed on their behalf by a designated member who must also print their name. The printed name and signature must be on the balance sheet, and any statement about the accounts being prepared under the small LLPs regime must appear above these. If the LLP has to attach an auditor's report to the accounts, the report must state the auditor's name. Where the auditor is a firm, the auditor's report must state the name of the auditor and the name of the person who signed it as senior statutory auditor on behalf of the firm. Please note: Companies House cannot accept a typewritten name as a signature on accounts. 7. Are there any exemptions from stating the auditor's name on the auditor's report or special auditor's report? Yes. More details are in question 6 of Chapter 13 on Auditors. Chapter 8 - Accounts for Companies House1. Are the accounts filed with Companies House different to the accounts prepared for the members? The designated members (who are responsible for filing accounts at Companies House) can simply submit a copy of the accounts that have already been prepared for the members. However small and medium-sized LLPs may submit an abbreviated version of those accounts which has less detail by combining certain items. Qualifying dormant LLPs can deliver even simpler annual accounts to Companies House. Further information is in Chapter 11 on Dormant LLPs. 2. Do all LLPs have to file their accounts at Companies House? All LLPs must deliver accounts to Companies House. A dormant subsidiary may be able to claim exemption from the preparation or filing of its accounts under certain circumstances - for more information refer to chapter 11. 3. Do I still need to file my accounts with HMRC and other regulatory bodies? Yes. The accounts submitted to Companies House are in accordance with the Companies Act 2006 as applied to LLPs. You must still file with other regulatory bodies according to their requirements and filing deadlines. 4. Will Companies House give technical advice on accounts? No. We can only give general guidance, not technical advice on specific accounting or legal issues. Your accounts are subject to legal requirements, and we are not qualified to give specialist advice. You may wish to consider consulting an accountant if you need this sort of advice. 5. How long do the designated members have to file the LLP's first accounts? If you are filing the LLP's first accounts and those accounts cover a period of more than 12 months, you must deliver them to Companies House:
The deadline for delivery to Companies House is calculated to the exact day. For example, an LLP incorporated on 1 January 2011 with an accounting reference date of 31 January has until midnight on 1 October 2012 (21 months from the date of incorporation) to deliver its accounts, not 31 October. You can check the date Companies House expects your accounts to be delivered by using the WebCHeck service. If the first accounts cover a period of 12 months or less, the normal time allowed for delivering accounts applies. Please note, the above period for filing accounts also applies to accounts prepared in accordance with the Companies Act 1985 or the Northern Ireland Order 1986 as applied to LLPs for the accounting periods starting on or after 6 April 2008. 6. How long do I normally have to file my accounts? Unless you are filing the LLP's first accounts the time normally allowed for delivering accounts to Companies House is 9 months from the accounting reference date. This also applies to accounts prepared in accordance with the Companies Act 1985 or the Northern Ireland Order 1986 as applied to LLPs for the accounting periods starting on or after 6 April 2008. Please be aware of the definition of a period of months in connection with filing accounts. 7. Will I still have to file by the original deadline if I shorten my accounting reference date? No. When an LLP has shortened its accounting period the new filing deadline will automatically be the longer of the following two options:
8. Can I apply for extra time to file? Yes. If there is a special reason for doing so, you may make an application to extend the time for delivering accounts to Companies House; for example, if there has been an unforeseen event which was outside the control of the LLP and its auditors. You must make the application and deliver it before the normal filing deadline. It must contain a full explanation of the reasons for the extension and the length of the extension requested. You can do this by emailing us or writing to:
9. What if the LLP delivers the accounts late? Failure to deliver accounts on time is a criminal offence. In addition, the law imposes a civil penalty for late filing of accounts on the LLP. The amount depends on how late the accounts arrive. More information is in our guide on Limited Liability Partnerships Late Filing Penalties. 10. What if the filing deadline falls on a Sunday or a Bank Holiday? If a filing deadline falls on a Sunday or Bank Holiday, the law still requires the designated members to file the accounts by that date. To avoid a penalty please ensure that you send acceptable accounts in time to arrive before the deadline. It is the date that you deliver acceptable accounts which meet the relevant legal requirements to Companies House that is important, not the date that you send the accounts. Please note: some CH offices do not receive post on Saturdays and may not have a post box. For up to date details of opening hours and access for delivery check our website. 11. What if I do not submit accounts to Companies House at all? If the registrar believes that an LLP is no longer carrying on business or in operation, he could strike it off the register and dissolve it. In this event, all the assets of the LLP, including its bank account and property, generally become the property of the Crown. Failure to deliver documents on time is a criminal offence. The designated members of the LLP risk prosecution. On conviction, a designated member could end up with a criminal record and a fine of up to £5,000 for each offence. This is in addition to the civil penalty imposed on the LLP for late filing of accounts. 12. What names should be given on the accounts for filing with Companies House? For filing, the copies of the accounts must state the following:
Please note that a legible signature on a balance sheet will not satisfy the additional requirement for a printed name. Companies House will reject any accounts that do not meet the above requirements. Where the auditor is a firm the auditor's report must state the name of the auditor and the name of the person who signed it as senior statutory auditor on behalf of the firm. 13. Where must the LLP name and number be shown? The LLP name and number should appear on one of the composite documents of the accounts such as the members' report or balance sheet. The name and number may also be shown on any cover sheet delivered with the accounts. For more details, including on circumstances in which auditors names may be omitted, please see chapter 13 - Auditors. 14. What if my accounts are rejected? If your accounts do not meet our requirements we will return them to you for correction. It is crucial that you get your accounts to us well before the filing deadline as you will not be given any extra time if they are rejected. 15. Can I submit accounts in any language? If you prepare accounts in a language other than English, you must also send with them a certified translation into English. If the registered office of the LLP is situated in Wales however you need only send the Welsh accounts if you so choose. LLPs may also send voluntary certified translations. You may only send certified voluntary translations in an official language of the European Union and you must also send with them with a completed Form LL VT01. 16. Can I submit any of the accounts information separately? Yes. Information about related undertakings can be annexed to the company's next annual return under certain circumstances. Where the LLP is required to include large amounts of information about related undertaking which the directors decide would make the notes excessive in length, the accounts will only need to include:
If an LLP takes advantage of this the full information, including the information already given in the accounts, must be annexed to the next annual return. Chapter 9 - Small LLP accounts1. What is a small LLP? There are 3 sizes of LLP to consider when preparing your accounts; small, medium or large. There are thresholds for turnover, balance sheet total (meaning the total of the assets) and the average number of employees which determine whether your LLP is small or medium-sized. Any LLP that does not meet the criteria for small or medium is a large LLP and will have to prepare and file full accounts. A small LLP can prepare and file accounts according to special provisions in the Companies Act 2006 as applied to LLPs and relevant regulations. This means that they can choose to disclose less information than medium-sized and large LLPs. LLPs whose securities are admitted to trading on an EEA regulated market and certain financial services LLPs cannot qualify as a small LLP. Similarly, LLPs which are part of a group which has members who are public companies or financial services LLPs cannot qualify as small, except in certain circumstances. If you think your LLP qualifies as small, you may wish to consult a professional accountant before you prepare accounts in accordance with the provisions applicable to LLPs subject to the small LLPs regime. 2. What are the conditions to qualify as a small LLP? A small LLP must meet at least two of the following conditions:
3. Are there any LLPs that cannot prepare and submit small accounts? Yes. If an LLP is, or was at any time during the financial year one of the following it cannot prepare and submit small LLP accounts;
A group is ineligible if any of its members is:
If you have any queries regarding financial services LLPs which are excluded from the small LLPs regime please contact the Financial Conduct Authority. 4. Can an LLP qualify as a small LLP every year? Generally, an LLP qualifies as 'small' in its first accounting period if it fulfils the conditions in that period. In any subsequent period, an LLP must fulfil the conditions in that period and the period before. However if an LLP which qualified as small in one period no longer meets the criteria for small in the next period, the LLP may continue to claim the exemptions available for the next period. If that LLP then reverts back to being small by meeting the criteria the exemption will continue uninterrupted. 5. What are the conditions to qualify as a small group? To qualify as small, a group headed by a parent LLP must meet at least two of the following conditions:
6. What will small LLP accounts include? Generally, small LLP accounts prepared for the members include:
And they should be accompanied by an auditor's report (unless the LLP qualifies for exemption from audit and takes advantage of that exemption). The balance sheet must contain a statement in a prominent position above the designated member's printed name and signature that the accounts have been prepared in accordance with the special provisions applicable to LLPs subject to the small LLPs regime. 7. What are the exemptions available for small LLPs? Small LLPs can prepare and file simpler, less detailed accounts than those required from large and medium LLPs. Parts 15 and 16 of the Companies Act 2006, as applied to LLPs, set out the requirements for LLPs subject to the small LLPs regime. Further information on the detailed format and content of accounts for small LLPs can be found in the Small Limited Liability Partnerships (Accounts) Regulations 2008. 8. What does a small LLP have to deliver to Companies House? The designated members of a small LLP can file a copy of the accounts prepared for members under the small LLPs regime, or an abbreviated version of these accounts. The content of abbreviated Companies Act accounts can be found in the Companies Act 2006 as applied to LLPs and in regulation 5 of and Schedule 3 to the Small Limited Liability Partnerships (Accounts) Regulations 2008. If you abbreviate the accounts, you must also get a special auditor's report unless the LLP is exempt from audit - see question 10 of this chapter. The report must state that in the auditor's opinion:
The right to prepare abbreviated accounts for Companies House does not affect the LLP's obligations to prepare full accounts for its members - see chapter 7. Small LLPs do not have to deliver a copy of the profit and loss account to Companies House. Small LLPs preparing accounts that are not IAS can deliver an abbreviated balance sheet. Small LLPs preparing IAS accounts must deliver a full balance sheet to Companies House. If you take advantage of the provisions applicable to small LLPs, whether you file abbreviated or full accounts, you must include a statement in a prominent position on the balance sheet and above the designated member's printed name and signature that the accounts have been prepared in accordance with the special provisions applicable to LLPs subject to the small LLP regime. You can find the content of abbreviated Companies Act accounts as applied to LLPs in the Companies Act 2006 and in Limited Liability Partnerships (Accounts) Regulations 2008. NOTE: If you choose to prepare abbreviated accounts for Companies House the LLP is still obliged to prepare full accounts for its members - see chapter 4. 9. Are there special rules for small groups? Yes, a parent LLP which qualifies as small need not prepare group accounts or submit them to Companies House if the group is small and not ineligible. If a small parent LLP decides to prepare group accounts their content is prescribed by Schedule 4 Part 1 of the Small Limited Liability Partnerships (Accounts) Regulations 2008. If you prepare group accounts, they must contain a statement above the printed name and signature on the balance sheet, confirming that 'the accounts have been prepared in accordance with the provisions applicable to LLPs subject to the small LLPs regime'. 10. What audit exemption is available for small LLPs? There is exemption from having an audit for certain small LLPs if they are eligible and wish to take advantage of it. 11. Which small LLPs qualify for audit exemption? For financial years ending before 1 October 2012, to qualify for audit exemption, an LLP must:
For financial years ending on or after 1 October 2012 a small LLP only needs to qualify as small. In other words it must meet any two of the following:
12. Are all types of small LLPs eligible for the exemption? No. The designated members must file audited accounts at Companies House if the LLP falls into any of the following categories:
Some subsidiaries may be exempt from audit where they meet certain conditions for financial years ending on or after 1 October 2012. Refer to Chapter 12 for more information. 13. What does an audit-exempt LLP need to submit to Companies House? If a small LLP qualifies for audit exemption, it may submit unaudited accounts to Companies House in the form of an abbreviated balance sheet and notes or if it chooses, full accounts. In either case, the balance sheet must contain the following statements above the designated member's printed name and signature: Audit Exemption Statement 'For the year ending ……………… (dd/mm/yyyy) the LLP was entitled to exemption from audit under section 477 of the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit)(Application of Companies Act 2006) Regulations 2008) relating to small LLPs. The members acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts. These accounts have been prepared in accordance with the provisions applicable to LLPs subject to the small LLPs regime.' Small LLPs that deliver a full balance sheet may choose not to include a copy of the profit and loss account. In this case, the balance sheet must also contain an additional statement that ' the accounts have been delivered in accordance with the provisions applicable to LLPs subject to the small LLPs regime.' 14. How long do I have to deliver audit-exempt accounts to Companies House? You have the same time for filing both audited and audit exempt accounts, and the law imposes the same penalties for late filing of all accounts. 15. Does an audit exempt LLP still have to send accounts to its members and debenture holders? Yes. Members and debenture holders have a right to receive or demand copies of accounts and any related auditor's report. Chapter 10 - Medium-sized LLP accounts1. What is a medium-sized LLP? As with a small LLP, a medium-sized LLP is determined by its turnover, balance sheet total (meaning the total of the assets) and average number of employees. A medium-sized LLP can prepare accounts according to special provisions applicable to medium-sized LLPs. It can also choose to submit reduced information to Companies House. Certain financial services LLPs, and LLPs whose securities are admitted to trading on an EEA regulated market, cannot qualify as medium-sized LLPs. Similarly, LLPs which are part of a group which has members who are public companies or certain financial services LLPs or companies cannot qualify as medium-sized for accounting purposes. 2. What are the conditions to qualify as a medium-sized LLP? To be a medium-sized LLP, you must meet at least two of the following conditions:
If it is not the LLPs first accounting period, it must have qualified as 'medium-sized' in the period before. 3. Are there any LLPs excluded from being treated as medium-sized? Yes. If an LLP is, or was at any time during the financial year, one of the following it is excluded from being treated as a medium-sized LLP:
A group is ineligible if any of its members is:
4. Can an LLP qualify as a medium-sized LLP every year? Generally, an LLP qualifies as 'medium-sized' in its first accounting period if it fulfils the conditions in that period. In any subsequent period, an LLP must fulfil the conditions in that period and the period before. However if an LLP which qualified as medium-sized in one period no longer meets the criteria for medium-sized in the next period, it may continue to claim the exemptions available for the next period. If the LLP then reverts back to being medium-sized by meeting the criteria the exemption will continue uninterrupted. 5. What will medium-sized LLP accounts include? Medium-sized accounts must include:
and be accompanied by an auditor's report unless the LLP is exempt from audit. 6. What are the exemptions available for medium-sized LLPs? Medium-sized LLPs preparing accounts under the Companies Act as applied to LLPs (but not IAS accounts) may omit disclosures about compliance with accounting standards and related party transactions from the accounts they send to their members. Also medium-sized LLPs preparing accounts that are not IAS accounts may choose to file a slightly reduced version of the profit and loss account. Further information may be found in the Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008. Some subsidiary LLPs may be exempt from audit where they meet certain conditions for financial years ending on or after 1 October 2012. Refer to Chapter 12 for more information. 7. What does a medium-sized LLP have to deliver to Companies House? Abbreviated accounts of a medium-sized LLP must include:
And be accompanied by a special auditor's report. The special auditor's report should state that in the auditor's opinion the LLP is entitled to deliver abbreviated accounts in accordance with section 445(3) of the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit)(Application of Companies Act 2006) Regulations 2008) and that they are properly prepared in accordance with regulation 4 of The Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008). The balance sheet must contain a statement, above the designated member's printed name and signature, that the accounts have been prepared in accordance with the special provisions of section 445(3) Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit)(Application of Companies Act 2006) Regulations 2008) in regard to medium-sized LLPs. 8. Are there special rules for medium-sized groups? No. A medium-sized parent LLP must prepare group accounts and submit them to Companies House. Chapter 11 - Dormant LLP accounts1. What is a dormant LLP? An LLP is dormant if it has had no 'significant accounting transactions' during the accounting period. A significant accounting transaction is one which the LLP should enter in its accounting records. When determining whether an LLP is dormant you can disregard the following transactions:
2. What exemption is available? Dormant LLPs can claim exemption from audit and need only deliver an abbreviated balance sheet and notes to Companies House. You do not have to include a profit and loss account in dormant LLP accounts filed at Companies House. An LLP may not take advantage of the dormant LLP audit exemption if it was at any time in the financial year in question an LLP that:
An LLP is not entitled to the dormant LLP audit exemption unless its balance sheet contains the statements required by the Act. Question 5 covers the statements. A dormant company that is also a subsidiary may, in certain circumstance claim exemption from the preparation and/or filing of its accounts - see question 9 for further information. 3. What are the conditions that a dormant LLP must meet to be exempt from audit? A dormant LLP is exempt from having an audit for that financial year if:
4. What information must dormant LLP accounts contain? Dormant LLP accounts submitted to Companies House need not include a profit and loss account. Unaudited dormant accounts are much simpler than those of a trading LLP, but must contain:
The right to prepare a dormant balance sheet for filing at Companies House does not affect the LLP's obligations to prepare full accounts for its members. 5. What statements do I need to make on the balance sheet? The following statements must appear above the designated member's printed name and signature: Audit Exemption Statement 'For the year ending ………………………. (dd/mm/yyyy) the LLP was entitled to exemption from audit under section 480 of the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit)(Application of Companies Act 2006) Regulations 2008) relating to dormant LLPs. The members acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.' An LLP that qualifies as small should also include the following statement on the balance sheet: 'These accounts have been prepared in accordance with the provisions applicable to limited liability partnerships subject to the small limited liability partnerships regime'. 6. How long do I have to submit dormant accounts to Companies House? You have the same time allowed for filing as for other accounts and the same penalties, for late filing apply. Further information can be found in our guide to Limited Liability Partnerships Late Filing Penalties. 7. What happens if my LLP starts trading again? The LLP will cease to be exempt from audit as a dormant LLP if it:
If either of these happened, you might have to submit full accounts for the financial year in which the LLP ceased to be exempt, and the designated members might need to appoint auditors for the LLP. However, it may be that the LLP would qualify for exemptions as a medium-sized or small LLP. 8. Is there an example of a dormant balance sheet for LLPs? Yes. The balance sheets shown below provide a guide to the information you need to include. These formats are designed to reflect all possible assets and liabilities that the LLP may have but you only need to include a particular heading if there is an amount other than nil to be shown. These model balance sheets are for illustration only. They should not be photocopied and filled in. There are two formats - marked A and B - either of which may be followed. The content of the two formats is identical; they simply present the balance sheet headings in a different order. The balance sheet must balance:
Each entry must be an amount in figures (not words) or '0.00'. Companies House will not accept any document which shows 'Nil' where a figure should appear. Each column of figures should be headed with the date on which the current and previous financial year ended. For both formats, the matters to be included in the notes to the balance sheet, if applicable, are listed here. DORMANT BALANCE SHEET FORMAT A Limited liability partnership No. ............................ Limited liability partnership Name .......................................... BALANCE SHEET AS AT ..../..../.......
For the year ending ………………………. (dd/mm/yyyy) the LLP was entitled to exemption from audit under section 480 of the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit)(Application of Companies Act 2006) Regulations 2008) relating to dormant LLPs. The members acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.” An LLP that prepares its accounts under the small regime should also include the following statement on the balance sheet: “These accounts have been prepared in accordance with the provisions applicable to limited liability partnerships subject to the small limited liability partnerships regime
For the year ending ………………………. (dd/mm/yyyy) the LLP was entitled to exemption from audit under section 480 of the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit)(Application of Companies Act 2006) Regulations 2008) relating to dormant LLPs. The members acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.” An LLP that prepares its accounts under the small regime should also include the following statement on the balance sheet: “These accounts have been prepared in accordance with the provisions applicable to limited liability partnerships subject to the small limited liability partnerships regime. Approved by the members on...............(date) Notes to the dormant limited liability partnership balance sheet The following must be given as notes to the balance sheet:
In addition, the following information must be given about any subsidiary undertakings and other investments:
9. Can a dormant subsidiary claim exemption from the preparation and/or filing of its accounts? Yes, if your subsidiary LLP is dormant throughout the financial year and its parent undertaking is established under the law of an EEA state then you may be able to claim exemption from the preparation of your accounts under section 394A of the Act as applied to LLPs, or from the obligation to deliver accounts to Companies House under section 448A of the Act as applied to LLPs. This applies to accounting periods ending on or after 1 October 2012. Any accounts ending before that date must still prepare and file accounts. Please note - The exemption from preparation (section 394A) also covers the requirement to file accounts and so an LLP that has claimed this exemption does not also need to claim exemption from filing (under section 448A). 10. What are the conditions for a dormant subsidiary to claim exemption from the preparation and/or filing of its accounts? To take up either of these exemptions the LLP must have been dormant throughout the financial year and its parent must be established under the law of an EEA state. You will also need to deliver the following documents to the Companies House, before the date on which your accounts are due:
Please note:
11. What information must be included in the form LL AA06? The statement must include the following information:
12. What is the effect of the guarantee and when does it take effect? The guarantee has the effect that the parent undertaking guarantees all outstanding liabilities that the subsidiary is subject to at the end of the financial year. The guarantee takes effect when it is delivered to the registrar and remains in force until all of the liabilities have been satisfied. 13. Can all dormant subsidiaries claim these exemptions? No. A dormant subsidiary is not entitled to the exemption if it was at any time within the relevant financial year: An LLP that
Chapter 12 - Audit exemption for subsidiary LLPs1. Can a subsidiary claim exemption from audit? Yes, a subsidiary may claim exemption from audit if its parent is established under the law of an EEA state, in certain circumstances. To take up this exemption you will need to deliver, before the date on which your accounts are due, the following documents to the Registrar:
Please note:
2. Are all subsidiaries able to claim this exemption? No. A subsidiary is not entitled to the exemption if it was at any time within the relevant financial year:
3. What information must be included in the form LL AA06? The statement must include the following information:
4. What is the effect of the guarantee and when does it take effect? The guarantee has the effect that the parent undertaking guarantees all outstanding liabilities that the subsidiary is subject to at the end of the financial year. The guarantee takes effect when it is delivered to the registrar and remains in force until all of the liabilities have been satisfied. 5. What statements do I need to include on the subsidiary LLP's accounts? The subsidiary LLP must include statements on the balance sheet of its individual accounts to the effect that: Audit Exemption Statement “For the year ending ………………(dd/mm/yyyy) the LLP was entitled to exemption from audit under section 479A of the Companies Act 2006 as applied to LLPs, relating to subsidiaries. Members' responsibilities:
Chapter 13 - Auditors1. What is an auditor? An auditor is a person who makes an independent report to the LLP members on whether the LLP has prepared its annual accounts in accordance with the requirements of the Companies Act 2006 as applied to LLPs and the applicable financial reporting framework. The report must state whether the accounts give a true and fair view of the LLP's state of affairs as at the end of the financial year and profit or loss for the year. 2. How do I appoint an auditor? An auditor must be appointed for each financial year, unless the designated members reasonably determine otherwise on the grounds that audited accounts are unlikely to be required. The designated members appoint the first auditor of the LLP. Thereafter the members may appoint or re-appoint an auditor each year within 28 days of the designated members' sending the accounts to the members or the end of the time when they should have been sent. If they do not do so for a particular year, however, the appointed auditor remains in office until the members determine to reappoint him or to remove him as auditor unless the LLP agreement requires the actual re-appointment. The auditor will check the accounts and accounting records of the LLP and prepare a report for the members. 4. What will the auditor's report include? The auditors' report must include:
The auditors' report must be either unqualified or qualified and must include a reference to any matters to which the auditors' wish to draw attention by way of emphasis without qualifying the report. The auditor will qualify the report either where there has been a limitation on the scope of the auditor's work or where there is a material disagreement between the LLP and the auditors about the accounts. 5. Who is responsible for signing the auditor's report? The auditors must print their name, sign and date the report they provide to LLP members upon completion of the audit. Where the auditor is a firm, the senior statutory auditor must sign the original auditors' report in his own name on behalf of the firm. He must also date the signature. The LLP must state the name of the senior statutory auditor in copies of the auditors' report it publishes. Copies of the auditors' reports delivered to Companies House must state the names of the audit firm and the senior statutory auditor, but need not be signed. 6. Are there any exemptions from stating the auditor's name on the auditor's report? Yes. If the LLP considers that there is a risk that the auditor or any other person would be at risk of serious violence or intimidation if the auditor's name (or the name of the “senior statutory auditor” who signed the report on the audit firm's behalf) appeared on filed or published copies of the report, it may determine to omit the name from those copies. Do not send a copy of the determination to Companies House, but you should send notice of it to the following address, The Secretary of State The notice must state:
The auditor's report attached to the accounts would need to contain the following statement: “The LLP has determined that the auditor's name should not be stated in accordance with section 506 of the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit)(Application of Companies Act 2006) Regulations 2008).” 7. Can my accountant be my auditor? An auditor must be independent of the LLP; therefore, you cannot appoint a person as an auditor if they are:
If your accountant does not fall into one of the above categories and if they are a registered auditor supervised by a recognised supervisory body, then they may act as the LLP's auditor. Remember: Not all members of a recognised supervisory body are eligible to act as an auditor but the appropriate supervisory body will be able to tell you whether a particular individual or firm is a registered auditor. 8. What and who are recognised supervisory bodies? These are bodies recognised by the Professional Oversight Board as having rules designed to ensure that auditors are of the appropriate professional competence. Each recognised body has strict regulations and a disciplinary code to govern the conduct of their registered auditors. The four recognised bodies are: The Institute of Chartered Accountants of Scotland The Institute of Chartered Accountants in England and Wales The Institute of Chartered Accountants in Ireland The Association of Chartered Certified Accountants 9. Is an auditor usually only concerned with annual accounts? Subject to the Auditing Practices Board ethical standards, the auditors' statutory duties are limited to checking that there are adequate books and records, and to reporting on the annual accounts. Subject again to those ethical standards, there is nothing to stop an LLP employing an auditor for other purposes, such as keeping the books or compiling the tax return, provided he (or she) does not take part in the management of the LLP. You should agree an engagement letter that sets out the scope of the auditor's engagement and the form of any reports that the auditor will make. 10. What must an auditor do when he ceases to hold office? If an auditor ceases for any reason to hold office, he or she must deposit a statement at the LLP's registered office. The statement should set out any circumstances connected with ceasing to hold office that the auditor considers should be brought to the attention of the members and creditors of the LLP. If there are any such circumstances, the LLP must send a copy of the statement to all the members of the LLP unless a successful application is made to the court to stop this. If the auditor does not receive notification of an application to the court within 21 days of depositing the statement with the LLP the auditor must send a copy of the statement to Companies House within a further 7 days. If there are no such circumstances, the auditor must deposit a statement with the LLP to that effect. The LLP does not have to circulate this statement to the members but a copy of it must be delivered to Companies House. Also where the auditor resigns or is removed from office, there are obligations on the auditor and the LLP to notify the 'appropriate audit authority'. There is more detailed guidance on these provisions on the website of the Financial Reporting Council. Chapter 14 - ChargesA charge is the security an LLP gives for a loan. An LLP that creates a charge (or any person interested in the charge) may deliver the statement of particulars, together with a certified copy of the charge instrument (if there is one), along with the relevant fee, to the registrar for registration (please note, for charges created before 6 April 2013, by an LLP registered in England and Wales or Northern Ireland, you must send the original charge instrument - not a certified copy) If an LLP creates a charge and the required documents and fee are not delivered to the registrar for registration within the period allowed for delivery and in the event that the LLP becomes insolvent, the charge will be void against the liquidator or administrator and any creditor of the LLP. This means that the debt for which the charge was given will remain payable, but it will be unsecured. Only the court can grant an extension of time for registration of a charge that Companies House did not receive in time. The period allowed for delivery is 21 days - details are set out in the table in question 1b alongside the description of the form There is a single, UK-wide regime for registering charges created on or after 6 April 2013. This means that all UK registered LLPs will send the same forms to Companies House. The only form that continues to apply specifically to charges registered on or after 6 April 2013 in Scotland is Form LLP466 - Particulars of an instrument of alteration to a floating charge . Different rules apply depending on when the charge was created:
1 Registration of Charges created on or after 6 April 2013 1a. Charges created on or after 6 April 2013 which you may register All charges may be registered, unless they are specifically excluded. Those charges excluded are; A charge in favour of a landlord on a cash deposit given as a security in connection with the lease of land A charge created by a member of Lloyd's (within the meaning of the Lloyd's Act 1982) to secure its obligations in connection with its underwriting business at Lloyd's A charge that any other Act specifically excludes from registration (for example, the Financial and Collateral Arrangements (No. 2) Regulations 2003 ) 1b. Which form should I use?
1c. Electronic filing Forms MR01, MR02, MR04 and MR05 can be delivered electronically using either WebFiling or software filing. This is the quickest, cheapest and most efficient way to file. Webfiling (LLPs may file charges against their own LLP using the company authentication code and will not need to obtain a LAC for this purpose) Find more details on WebFiling charge documents Software filing 1d. Things to remember when filing a Form LLMR01 The Form LLMR01 is the most commonly filed charge form at Companies House. (If there is no instrument, you must use form LLMR08 instead). It is important to act as quickly as possible and, when delivering the documents to Companies House, remember to;
1e. What if the charge instrument contains personal information? You will be able to remove certain personal information from the certified copy of the instrument before you send it to Companies House. The information that you can remove is:
It is up to you how you choose to remove this information. 2. Acquisition of property which is already charged If you acquire property that is already subject to a charge, and the charge is of a type which is not an excluded charge, you may register this charge. The LLP (or any person interested in the charge) should complete and deliver form LLMR02 to Companies House, accompanied by a certified copy of the instrument that creates or evidences the charge. If there is no instrument, you must deliver form LLMR09 instead. Satisfaction of Charges 3. What should I do if the LLP has satisfied the debt? The LLP does not need to inform Companies House that it has fully or partly satisfied the debt. However, it is in the LLP's own interests that potential investors and lenders are aware that it has satisfied all or part of the debt. If you wish to notify Companies House, you should send form LLMR04 4. What if the charged property ceases to be charged or to belong to the LLP? There is no requirement for an LLP to inform Companies House that its property has been released from a charge or that the property no longer belongs to the LLP. However, it is in the LLP's own interests that potential investors and lenders are aware of this. If you wish to notify Companies House, you should deliver form LLMR05. Further information on the registration of charges created on or after 6 April 2013 can be found in Part 25 of the Companies Act 2006 (as amended by The Companies Act 2006 (Amendment of Part 25) Regulations 2013 as applied to LLPs by the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009). 5. Registration of charges created before 6 April 2013 5a. Charges created before 6 April 2013 which you must register at For LLPs incorporated in England and Wales, Wales and in Northern Ireland, the charges that must be registered are:
For LLPs incorporated in Scotland, the charges that must be registered are;
5b. Which form should I use for charges created before 6 April 2013?
Chapter 15 - Quality of documents 1. What happens to the documents I send to Companies House? We scan the documents and paper forms you deliver to us to produce an electronic image. We then store the original paper documents and use the electronic image as the working document. When a customer searches the public record, they see the electronic image reproduced on-line. So it is important not only that the original is legible, but that it can also produce a clear copy. When you submit a document electronically, we automatically create an electronic image from the data you have provided us with. This chapter sets out some guidelines to follow when preparing a document for filing at Companies House. 2. How should I set out documents? Documents submitted electronically Documents submitted electronically must comply with the specifications set out by the registrar in his rules on electronic filing. The formats for software and web filing are contained in the rules published on the website, and our website contains all the formats you will need to file via that method. Many of the businesses shown on our list of software suppliers provide web-based services and depending on the volume of filings you anticipate making, it may be more practical for you to use their services. Electronic applications are processed faster than those filed on paper. We aim to process electronic documents within 24 hours of receipt. Paper documents Generally, every paper document sent to Companies House must state in a prominent position the registered name and number of the LLP. There are a few exceptions to this rule, which are set out in the published registrar's rules. Paper documents should be on A4 size, plain white paper with a matt finish. The text should be black, clear, legible, and of uniform density. Letters and numbers must be clear and legible so that we can make an acceptable copy of the document. The following guidelines may help: When you fill in a paper form please:
Glossy accounts If you are producing colour printed glossy accounts with pictures, please save them for your shareholders and others who will appreciate them. We still need black on white with a matt finish. A typed, unbound version of a printer's proof is ideal, provided it has the necessary signatures. Each year around 6,000 sets of accounts are rejected due to inadequate legibility. The top 3 reasons include:
3. Where can I find out more about this? For further guidance on print requirements please email your enquiry or telephone 0303 1234 500 Chapter 16 - Further Information 1. How do I deliver information to Companies House? For full details of all the ways of delivering documents to Companies House, electronically or on paper, please refer to the registrar's rules which appear on our website .The safest and most secure way to deliver statutory information to Companies House is to use our online filing services. We aim to process electronic documents within 24 hours of receipt. For more information and registration details please visit our website. If you are delivering documents by post, courier, Document Exchange Service (DX) or Legal Post (in Scotland) and would like a receipt, Companies House will provide an acknowledgement if you enclose a copy of your covering letter with a pre-paid addressed return envelope. We will barcode your copy letter with the date of receipt and return it to you in the envelope provided. Please note: an acknowledgement of receipt does not mean that a document has been accepted for registration at Companies House. Please Note: Companies House does not accept any statutory documents by fax, PDF (except for electronically filed certified copies of charge instruments) or by email. 2. Do I have to pay to file documents at Companies House? You do not have to pay a fee for many of the documents that you have to send to Companies House, but some do require a fee and we will not accept them for registration without it. For full details you should refer to our website. 3. Can I file documents in other languages? As a general rule the law requires that you file documents sent to Companies House in English. There are exceptions as detailed below. You can draw up and deliver documents in Welsh if you are an LLP with its registered office situated in Wales. LLPs can deliver the following documents in other languages if the document is accompanied by a certified translation into English:
In addition, LLPs may also file voluntary certified translations of any document specified in section 1078 of the Companies Act 2006 as applied to LLPs by the Limited Liability Partnerships (Application of the Companies Act 2006) Regulations 2009. These are:
The voluntary translation must relate to a document delivered to Companies House on or after 1 October 2009. Voluntary translations can only be filed in an official language of the European Union and must be accompanied by Form LL VT01, which will link the translation to the original document. 4. Where do I get forms and guides? This is one in a series of Companies House publications which provides a simple guide to the Companies Act and related legislation. All statutory paper forms and guides are available free of charge from Companies House. The quickest way to otain them is on our website or by telephoning 0303 1234 500. You can also obtain paper forms from company law stationers, accountants, solicitors and company formation agents. |
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