It is not possible to convert an existing limited company to an LLP because they have completely different internal structures and taxation requirements. If your business is currently set up as a limited company and you want to change it to an LLP, you will have dissolve your existing company and register your business as a Limited Liability Partnership.
This type of conversion process is much easier than it was before the introduction of the LLP structure in 2001. However, please consult a specialist accountant or solicitor before doing so, because it involves a lot of planning and administration.
How to approve a change of business structure
The first step is to get a majority vote of the company shareholders approving the change. A general meeting should be held and the shareholders will have to pass a special resolution. A 75% majority vote in favour of the change must be achieved.
If the change of structure is approved, you will then need to identify and change the contractual agreements the company has with its suppliers, clients, banks, lenders, employees, etc. A transfer agreement will have to be completed to officially transfer the business, assets and liabilities to the new LLP.
The company’s articles of association and shareholders’ agreement will have to be redrafted as an LLP Agreement. This agreement will outline the internal management structure of the new partnership, the rights and duties of the LLP members (partners), and the relationship between the members and the LLP.
Registering an LLP
When you are ready to register an LLP, you can complete an online application form through Rapid Formations. Our comprehensive LLP company formation package will enable you to incorporate an LLP with Companies House in just 3 working hours.
To so do, please follow these 5 simple steps:
- Choose a name for your LLP. You can use your company name if the business has been officially dissolved or you changed the name of the old company. Otherwise, you will have to choose a new name.
- Select our LLP formation package.
- Choose any required address services. We offer a Registered Office Address and Business Address in London or Glasgow.
- Proceed to checkout to pay for your formation package and any additional services.
- Fill in the online application form and submit it electronically to Companies House.
When your application is complete, we will check it over before sending it to Companies House via secure Software Filing. Within approximately 3 working hours, your application should be approved and your new LLP will be ready to trade. You will receive your incorporation documents via email and you will have free access to our Online Company Manager. This facility will allow you to view and update your LLP details online at any time.