An LLP that is left with a single member does not dissolve automatically, but the clock starts. If it carries on business with fewer than two members for more than six months, section 4A of the Limited Liability Partnerships Act 2000 makes anyone who is a member after those six months, and knows the LLP has only one member, jointly and severally liable with the LLP for debts contracted during that period. The fix is to admit a second member, transfer the business, or close the LLP before the six months run out.

How does an LLP end up with one member?

An LLP needs two or more persons to be incorporated: section 2(1)(a) of the 2000 Act requires two or more persons associated for carrying on a lawful business with a view to profit to subscribe the incorporation document. After that, membership can fall for ordinary reasons. Under section 4(3) a person ceases to be a member by agreement with the other members, by giving reasonable notice where there is no agreement on leaving, or by death or dissolution. In a two member LLP, a single retirement, death, or the dissolution of a corporate member leaves one member behind.

It often happens in small professional practices that were set up as two person LLPs. The remaining member keeps trading, sometimes without realising that the law treats a one member LLP differently. For the wider background see our guide to limited liability partnerships, and for the departing member’s side see retiring as an LLP member.

What exactly does the six month rule say?

Section 4A applies where an LLP carries on business without having at least two members, and does so for more than six months. A person who, for the whole or any part of the period that it carries on business after those six months, both is a member and knows that it is carrying on business with only one member, is liable jointly and severally with the LLP for the payment of the LLP’s debts contracted during that period, or that part of it.

Several points follow from the wording:

  • The first six months carry no personal liability under section 4A. The exposure starts only once business continues beyond six months.
  • Only debts contracted after the six months are caught, not debts already owed when membership fell to one.
  • Liability depends on knowledge. In practice a sole remaining member will almost always know.
  • Liability is joint and several with the LLP, so a creditor can pursue the member personally for the whole debt without first exhausting the LLP.

Section 4A was inserted from 1 October 2009 by the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009.

Can the LLP be wound up because it has one member?

Yes. Section 122 of the Insolvency Act 1986, as applied to LLPs by Schedule 3 to the Limited Liability Partnerships Regulations 2001, lists the grounds on which the court may wind up an LLP. One ground is that the number of members is reduced below two. Others include that the LLP is unable to pay its debts, that it has not started business within a year of incorporation or has suspended business for a whole year, and that winding up is just and equitable. A creditor or other interested party therefore has a ready made ground for a winding up petition once membership falls to one, whether or not the six months have passed.

What happens to the designated member role?

Under section 8(2), if there would otherwise be no designated members, or only one, every member is a designated member. A sole member is therefore automatically the designated member and carries all the designated member duties, including preparing, signing and filing the accounts and the confirmation statement. Companies House guidance states that an LLP must have at least two designated members at all times, which a one member LLP cannot meet. See designated members of an LLP.

The departure that caused the problem must still be filed. Under section 167G of the Companies Act 2006, as applied to LLPs by regulation 17A of the 2009 Regulations, the LLP must notify Companies House within 14 days beginning with the day a person ceases to be a member, using form LL TM01. Filing promptly also protects the leaver, because section 6(3) of the 2000 Act treats a former member as still a member to anyone dealing with the LLP until that person has notice or notice of the departure has been delivered to the registrar.

What about tax?

HMRC’s Partnership Manual at PM131450 explains that an LLP carrying on a trade, profession or business with a view to profit is treated as a partnership for tax under section 863 of the Income Tax (Trading and Other Income) Act 2005, so that its activities are treated as carried on in partnership by its members. PM131420 states that an LLP must have at least two registered members. The legislation and manual do not set out a separate regime for a one member LLP, so the tax position of a period spent with a single member, and of any restructuring to fix it, should be reviewed with an adviser rather than assumed. For the general position on members joining and leaving, see partners joining and leaving: tax.

What are the options for fixing it?

  1. Admit a new member. Under section 4(2) any person may become a member by agreement with the existing members. A member can be an individual or a company; HMRC’s PM131420 notes that individuals, corporates (including other LLPs) and Scottish partnerships can be members, but an English partnership cannot. The appointment is notified on LL AP01 (or LL AP02 for a corporate member) within 14 days, and an individual member must have verified their identity with Companies House.
  2. Transfer the business. The remaining member may move the business to a sole trade or a company and then close the LLP. That is a disposal of the business and its assets, so the tax and contract consequences need working through.
  3. Close the LLP. If the business is ending, the LLP can apply to be struck off using LL DS01 or be wound up. If assets are distributed or the LLP is insolvent, the clawback rule in section 214A of the Insolvency Act 1986 may be relevant; see LLP clawback under section 214A.

Whichever route is chosen, it should be in place well within the six months.

How might the timeline look?

Illustration only. Two members run a design LLP. One retires on 31 January. The other carries on alone.

Date Event Consequence
31 January Member retires LL TM01 due within 14 days; sole member becomes the only designated member under section 8(2)
1 February to 31 July Business continues with one member No section 4A liability yet, but a winding up ground exists
From 1 August Business still continues with one member Remaining member jointly and severally liable for debts the LLP contracts from this point
1 September New supplier contract signed for 10,000 pounds Supplier can claim the full amount from the member personally if the LLP does not pay

Had a second member been admitted before the end of July, section 4A would never have applied.

What mistakes come up most often?

  • Assuming the LLP dissolves automatically, or that nothing changes, when the business continues with one member.
  • Counting six months from the wrong date. The period runs from when the LLP began carrying on business without at least two members.
  • Admitting a nominee or token second member without a genuine agreement. HMRC’s manual treats the registered member who entered into the agreement as the person taxable on the profit share, so a second member has real tax consequences.
  • Forgetting the LL TM01 for the departing member, which leaves the old member exposed under section 6(3) and the LLP in default.
  • Ignoring the separate risk of a winding up petition on the ground that membership has fallen below two.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.