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Partnership, LLP or corporate practice

Members have been able to practise through a corporate vehicle since December 1991. A corporate practice can take one of two forms: a Limited Company or, since 6 April 2001, a Limited Liability Partnership (LLP).

Your choice

It is a matter of personal and practical choice as to whether a corporate practice or an unincorporated practice is the more advantageous to your own particular circumstances.

A corporate practice can provide a similar range of services to those provided by a sole practitioner or partnership, subject to meeting certain regulatory requirements.

There are many factors that will influence your decision, starting with the commercial implications but also including taxation and legal issues, practical matters and regulatory requirements.

A limited company can have one director, but an LLP must have a minimum of two members, although one of those members could be a limited company.

Incorporation increasingly popular

Practising through a corporate structure has become increasingly popular, although the factors determining which kind of structure is most appropriate are different.

The main reasons for incorporating as a limited company appear to be either to achieve tax efficiencies or to separate ownership from management.

The establishment of an LLP is usually more driven by liability issues and the fact that it is a separate legal entity from the individual members. Other reasons for incorporation are succession and retirement from practice.

Corporate practice helpsheet

The Corporate Practice helpsheet - PAS1/HS08 (PDF 120KB/14 pages) reviews the major issues for consideration when contemplating practising within a corporate structure.

It examines the specific requirements of the ICAEW on members practising in a corporate practice and, in particular:

  • identifies areas that practitioners need to consider when deciding whether to practise within a corporate structure
  • highlights some of the regulatory and other requirements of corporate practice
  • provides a useful checklist covering a wide range of issues for consideration.

Partnership helpsheets

Partner appraisal

An outline of suggested issues to be addressed in partner appraisals from ICAEW’s Practice Support Services.

Further information

For further enquiries please contact Advisory Services on +44 (0)1908 248025 or email practice.services@icaew.com