Comparison Guide · 2026-07-03
General Partnership vs LLP UK 2026
A general partnership is the simplest way for two or more people to run a business together, requiring no Companies House registration but leaving every partner personally and jointly liable for the business's debts. An LLP (Limited Liability Partnership) gives members limited liability like a company while still being taxed like a partnership, at the cost of Companies House filing requirements and public accounts.
At a Glance
| Feature | General Partnership | LLP |
|---|---|---|
| Personal liability | Unlimited — partners are personally liable for all business debts, jointly and severally | Limited — members' liability is generally limited to their capital investment |
| Registration | Register with HMRC for Self Assessment only; no Companies House filing | Must register at Companies House and file annual accounts and a confirmation statement |
| Tax treatment | Each partner pays Income Tax and Class 4 NI on their share of profits (transparent for tax) | Same — LLP members are taxed as self-employed individuals on their profit share |
| Privacy of accounts | No public filing of accounts | Accounts are public at Companies House, like a limited company |
| Admin burden | Minimal — a partnership agreement is recommended but not mandatory | Higher — statutory filing, designated member duties, potential accountancy costs |
| Best suited to | Small, low-risk businesses between trusted partners (e.g. tradespeople, family businesses) | Professional services firms (solicitors, accountants, consultants) wanting liability protection |
When General Partnership Wins
- You want the simplest, cheapest possible structure with no public filing
- The business carries low financial and legal risk
- You are working with a small number of trusted partners, often family members
When LLP Wins
- You want protection from personal liability for the actions or debts of other partners
- You are in a higher-risk profession (professional services, consultancy) where being sued is a real possibility
- You are comfortable with Companies House filing in exchange for limited liability
Frequently Asked Questions
Is an LLP taxed like a limited company or a partnership?
An LLP is tax-transparent like a general partnership — it does not pay Corporation Tax itself. Each member is taxed individually on their share of the LLP's profits through Self Assessment, paying Income Tax and Class 4 National Insurance, just as they would in an ordinary partnership.
Do LLP members have any personal liability at all?
LLP members' liability for the LLP's debts is generally limited to the amount they have invested or agreed to contribute, similar to a limited company shareholder. However, members can still be personally liable for their own negligence or wrongdoing, and in insolvency situations, "clawback" rules can require members to repay withdrawals made shortly before insolvency.
Does a general partnership need a written agreement?
Not legally, but it is strongly recommended — without a partnership agreement, the default rules under the Partnership Act 1890 apply, which typically split profits equally regardless of contribution and can create disputes over decision-making, exit terms and dissolution. A tailored agreement covering profit shares, decision-making and what happens if a partner leaves avoids costly disagreements.
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How many people are needed to form an LLP?
An LLP needs a minimum of two designated members (who take on additional legal responsibilities, like filing accounts and the confirmation statement) and can have any number of ordinary members beyond that, whereas a general partnership similarly needs at least two partners but has no "designated member" concept.
Can a general partnership convert to an LLP later?
Yes — many professional partnerships incorporate as an LLP once the business grows or the perceived liability risk increases, transferring the business and assets into the new LLP structure. This requires registering the new LLP at Companies House and formally winding down the old partnership, ideally with accountancy and legal advice to manage the transition cleanly.
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Disclaimer: This comparison is general information, not personal financial advice. Figures reflect the 2026/27 UK tax year and can change. Always check current HMRC/gov.uk guidance or speak to a regulated adviser before making a decision.