Starting out in contracting - Ltd or LLP

[Contract123]

Hi there, I'm thinking of setting up my own business with a friend (business partner). We want to provide training and offer consultancy services to other businesses. Do you have any clue where we should start or look for info on how we get set-up and do you have any reflections on the benefits of being a ltd company VS an LLP? Being an LLP seems a bit more appealing due to the flexibility around adding members and the fact that you can add a Ltd. But we're feeling a bit clueless!

All advice welcome

[cojak]

There will be others with more details on the finance and legal side, but for me it depends on how you will be obtaining work and clients. I’m not sure that many businesses will accept LLPs for anything other than solicitors. They will accept Ltds.

[northernladuk]

Contractor Calculator article on LLP's might be of use
https://www.contractorcalculator.co....rship_llp.aspx

But you really need to engage and accountant and ask them. There do seem to be benefits to an LLP but there are a number of pitfalls, both commercially and tax wise.

I'm not expert, in fact bordering on clueless but some food for thought/questions to ask the accountant; -

Most agents in our area, standard T&M bum on seat roles will probably not deal with an LLP. It's painful enough when they insist on the person doing the work being the majority shareholder and or the only director. If they can't get their head around that properly I very much doubt many agents will be prepared for an LLP. If this isn't your line of work then fair enough but consider your business model, clients and method of getting work carefully.

The tax on an LLP can be complex. Company cars for example. There is a case of two partners having cars provided by a separate LTD but something to do with the LLP made it so they were providing cars for sole use which is a different tax situation. Not sure how relevant this is but you mentioned a LTD. You could drop yourself right in to this situation
https://www.accountingweb.co.uk/tax/...pany-directors

Also IR35 and MSC legislations are affected. Not sure how much but this article mentions both and with MSC being a bit of a hot topic at the moment it's worth understanding at least the last paragraph of the article.
https://www.contractoruk.com/success..._overview.html

On the IR35 aspect this needs looking at carefully
https://www.qdoscontractor.com/news/...d-partnerships

And on a personal note, I'd be loathed to set up a business with a friend. Never seems to end well.