Can I sell my LLP?

Asked by: Althea Yundt  |  Last update: January 26, 2026
Score: 4.3/5 (60 votes)

Yes, you can sell your interest in a Limited Liability Partnership (LLP), but it's not like selling shares; you're selling your partnership interest, and the process is governed by the LLP Agreement, requiring potential consent from other members and often involving buy-sell provisions or rights of first refusal for existing partners. You'll need a professional valuation and should expect tax implications, so engaging lawyers and accountants early for due diligence, valuation, and proper documentation (like amending partnership records) is crucial.

How do you value an LLP?

In the absence of such procedures, law firms are normally valued using one of three methods:

  1. Applying a multiple to maintainable fee income.
  2. Applying a multiple to maintainable net profits or earnings.
  3. Valuing the net recoverable assets of the practice and determining whether to add an element of goodwill.

How do you transfer ownership of an LLP?

Transferring ownership in Limited Liability Partnerships (LLPs) is regulated by the LLP Act, which differs from regulations for other business entities. In an LLP, ownership transfer can be done by either adding or removing partners, which is a relatively straightforward process.

Can a limited partnership be sold?

If offered privately, limited partnerships are typically sold through Regulation D private placements, where unlimited numbers of accredited investors can participate. Limited partnerships can be sold through public offerings as well.

How to get rid of an LLP?

You can only compel a dissolution through winding up procedures. Alternatively, you could resign, which would entitle you to a claim for half the profits and your capital, or you could apply to wind the partnership up. If you choose that route, then yes, everything would need to be disposed of.

Can You Transfer a Property to Your Own Limited Company?

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Can you liquidate an LLP?

You can apply to Companies House (the Registrar) for voluntary strike off and dissolution if you no longer require your limited liability partnership (LLP). To do so, a majority of the LLP's members must agree to the action and sign the application. If there are only two members, both members must sign it.

What is the downside of an LLP?

Disadvantages of a Limited Liability Partnership (LLP) include difficulty raising capital (no stock), public disclosure of finances, complex compliance/setup, restricted tax relief on losses, limited lifespan if a partner leaves, and potential unlimited liability for "designated" partners or for a partner's negligence. LLPs are also not available in all states or for all professions and generally require at least two partners.
 

How to sell a limited partnership?

A Seller may use an intermediary to sell its limited partnership interest. Typically, the intermediary's role is limited to: – contacting Buyers; – assisting with due diligence; – assisting with negotiations or the auction process; and – assisting with the closing of the sale.

What is the most tax efficient way to sell a limited company?

A share sale is usually more tax-efficient for the seller, while an asset sale gives buyers more control over what they purchase, but it can lead to higher tax costs for the seller. Failure to understand the difference could result in you paying much more tax than you'd planned.

What are the rules for LLP dissolution?

Partners shall pass a resolution for voluntary dissolution with at least three-fourth (3/4) majority of total number of its partners. LLP shall file the resolution with the RoC, in Form No. 1, within 30 days of passing resolution.

Is capital withdrawal from LLP taxable?

There is no tax implications on withdrawal of capital from LLP.

How much does it cost to do a transfer of ownership?

A "change of ownership price" involves various fees (title transfer, registration, plate fees) and potential sales tax, varying significantly by state and vehicle type, with costs often ranging from under $100 (like Hawaii's $5 transfer fee + taxes) to several hundred dollars (like Florida's $75 title + $22-$33 registration + $28 plate + tax), plus potential penalties for late filing or dealer document fees. 

Who are the owners of an LLP?

A limited liability partnership (LLP) is a type of business structure where the owners, called partners, have limited personal liability for the debts and actions of the business. This means that their personal assets are protected, and they are only responsible for the amount they have invested in the LLP.

How to get out of LLP?

A Partner in a LLP may cease to be a partner of a LLP in accordance with the LLP agreement between the Partners. If the LLP agreement doesn't have any restrictions, then a Partner in a LLP can resign from a LLP by providing notice of resignation in writing not less than 30 days to the other Partners in the LLP.

How much is a business worth with $500,000 in sales?

A business with $500,000 in sales can be worth anywhere from $125,000 to over $1 million, depending heavily on profitability (SDE/EBITDA), industry multiples, assets, customer base, and growth potential, with typical valuations often using a multiple of 1x to 3x or more of Seller's Discretionary Earnings (SDE) or EBITDA, not just sales. A general rule of thumb is to find your annual profit (SDE) and multiply it by an industry-specific factor, but a high-profit, low-asset service business might fetch more than a low-margin retail store with similar revenue, say HedgeStone Business Advisors. 

How is an LLP taxed?

LLPs do not pay income tax but they are subject to the annual tax of $800. Your return is due the 15th day of the 3rd month after the close of your taxable year. For more information visit Due dates for businesses.

What is the 36 month rule?

It allowed sellers to claim CGT exemption for the final 36 months of ownership, even if they had moved out. However, this was reduced to 18 months in 2014 and further to 9 months in 2020, which remains the rule today. This general law is in place as it prevents short-term transaction benefits concerning taxation.

At what point do I give up on my business?

If you're convinced that there really isn't a market for your products and services, if there aren't enough people who will pay you the amount of money that you need in order to make a profitable business, or if the costs are unsustainably high, then it may be healthy and prudent to wind down this part, or all of the ...

What is the 6 year rule for capital gains tax?

The "6-year rule" for Capital Gains Tax (CGT) in Australia lets you treat a former main residence as if it's still your primary home for up to six years after you move out and start renting it out, potentially making any capital gain during that period tax-free. You must have lived in the property initially, can only claim it for one property at a time, and the exemption resets if you move back in, allowing for multiple uses. It's a common strategy for "rentvesters" or those temporarily relocating for work, but requires careful record-keeping.
 

What is the best way to sell a limited company?

If you are a limited company, you need to consider whether to do an asset sale or a share sale. There are significant differences between the two methods, not least the effect on the tax you will have to pay. Clearly any prospective buyer may also have their own view on this. Ultimately, you'll want to find a balance.

How do I get out of a limited partnership?

  1. Examine Your Limited Partnership Agreement.
  2. Vote to Dissolve Your Limited Partnership.
  3. File Dissolution Papers.
  4. Publish Notice of Your Dissolution.
  5. Review Your Third-Party Contracts.
  6. Liquidate Your Assets and Settle Your Debts.
  7. Distribute Remaining Assets to Partners.
  8. Cancel Business Accounts, Licenses, and Permits.

Who pays taxes in a limited partnership?

When a company is structured as a partnership, including a limited liability company (LLC) taxed as one (hereafter referred to as a partnership), it is not subject to tax. Instead, taxable income passes through to the owners (hereafter referred to as partners), who are responsible for paying the tax.

Why would you choose an LLP over an LLC?

Choosing to run your company as an LLC or LLP depends upon your profession and your state. If you're a professional who needs a license to do business, you're better off running your company as an LLP if your state allows it. If you are not a professional, an LLC is usually the best fit for your business.

Can an LLP be liquidated?

Under the Limited Liability Partnership Act of 2000, an LLP is defined as a distinct legal and corporate entity. This means that – like any limited company – should an LLP become insolvent it can enter formal insolvency proceedings such as liquidation.

What are the tax benefits of an LLP?

LLPs are eligible for various tax deductions under the Income Tax Act, including deductions for business expenses, depreciation, and interest on partner's capital. These deductions can significantly lower the taxable income of the LLP, thereby reducing the overall tax burden.