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How do the business structures differ?
Partnership LLP Limited company
Limited liability No Yes, unless negligent Yes, unless negligent
Laws and statutes Partnership Act 1890 – 50 sections New legislation based on Companies Act and so on – 76 pages of regulations Companies Acts 1985 and 1989 – more than 900 sections and schedules
Audit requirement No To be decided Yes
Disclosure of information None Likely to be in accordance with Companies Acts In accordance with Companies Acts
Remuneration Profits/drawings Profits/drawings Salary/dividends
Taxation Income tax Income tax Income tax, National Insurance and corporation tax
Ownership Partners Partners Shareholders
Management Partners Partners Directors
Costs of changing No additional costs Legal costs in setting up Possible audit costs Legal costs of conversion Audit costs Additional tax costs