Headstart: LLPs – Not so great expectations.

As the organisation put finishing touches to its preparations for the new legal entity’s introduction next week, including its fee pricing structure, a spokesman also said it was anticipating the main interest to come from established professional partnerships – with firms of accountants well represented.

They will be able to incorporate themselves as limited liability partnerships by filing the appropriate documents at Companies House from 6 April.

The spokesman emphasised it was impossible to predict demand with any accuracy, but conceded that he was ‘not expecting a big rush’.

He added: ‘Our market research indicates a high level of public awareness, particularly in primary professions such as lawyers and accountants.’

He went on to say that Companies House research indicated the attraction of limited liability seems to lie in the protection it offers individual partners, mainly because the current situation makes it difficult for firms to attract new partners.

Most respondents saw the greater disclosure demands under LLPs over standard partnerships as an acceptable trade-off for this protection, he added.

The research also indicated that any extra costs and administration were not being seen as a big burden and the new structure is attracting interest from sole traders and existing limited companies.

Companies House this month circulated guidance on the new structure, which it has also posted on its website. The guidance includes details of the necessary forms and registration costs.

The new forms will closely follow those already in use for companies in format, except that they have an LLP prefix as part of the reference.

Companies House is planning to provide the most common forms and guidance in Welsh on request. The cost for registration of an LLP, subject to final approval by parliament, has been set at £95, with the registration of an annual return set at £35.

‘We are prepared and have all the mechanisms in place. We are ready with guidance for everyone,’ said the spokesman.

However, businesses are not allowed to submit LLP incorporation forms before 6 April. Any dated or submitted earlier than this will be returned.

The Companies House estimates for take-up of the new structure are considerably less than those suggested by the DTI, which last year said its consultation process had found that 90,000 firms had ‘expressed an interest’ in changing their status. The DTI acknowledged, however, that the actual take-up could be considerably lower.

The tax treatment for LLPs has been fixed, both by statutory provision and by measures set out by the Inland Revenue in December’s tax bulletin.

A statement of recommended practice on LLP accounting is due out later this year. The SORP will include guidance on annuities.

The Companies House guidance and information about LLPs is on its website, www.companieshouse.gov.uk, under the What’s New section.

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