Comparative analysis of UK corporate investment vehicles

This article examines the principal corporate forms available in the UK—private companies limited by shares (Private Ltd Companies), limited liability partnerships (LLPs), and limited partnerships (LPs)—through the lens of investors pooling capital to invest in early and growth stage companies. It considers how each form allocates liability, structures governance, satisfies disclosure obligations and impacts tax obligations.

Liability: From limited exposure to unlimited risk

Private Ltd Companies cap shareholder liability at the amount of any unpaid share capital, insulating personal assets from business debts. LLPs occupy a middle ground: while members’ liability is generally confined to their capital contributions, it may be extended through contractual arrangements such as personal guarantees. LPs are unique in pairing passive limited partners with a general partner (GP), whose liability is unlimited. 

Governance: Structured boards versus flexible agreements

Governance in Private Ltd Companies relies on a board of directors and shareholder resolutions, offering a familiar, codified decision-making process. LLPs dispense with formal boards altogether (appointing designated members to carry out director style functions and make operational decisions that fall outside of those matters requiring a partnership vote); members craft bespoke governance through their LLP agreement, which governs voting on operational and strategic matters and profit sharing amongst other matters.  LPs vest control in the GP, with limited partners remaining passive, and bound by the terms of the limited partnership agreement. 

Compliance: Disclosure requirements and registry filings

Private Ltd Companies have moderate compliance burdens: annual confirmation statements, statutory accounts, and, if they exceed certain size thresholds, an audit. LLPs mirror these requirements but bypass share capital filings and audits are triggered only at higher turnover levels. LPs require minimal ongoing filings under the Limited Partnerships Act 1907—no public accounts or audit unless triggered by related LLP status. For investor syndicates, the low-disclosure LP is favoured to preserve confidentiality around investment performance and portfolio composition.

Tax considerations: Transparency and efficiency

LLPs and LPs are both tax transparent. This means that profits are not subject to corporation tax at the entity level; instead, they flow directly to the members or partners, who pay tax as though they were themselves directly carrying out a share of the transparent vehicle's taxable activities. This avoids the double taxation that can arise in corporate structures—where profits are taxed within the company and again when distributed as dividends. For purely investment-focused vehicles, this transparency can be highly efficient.  It also allows an investor to be taxed on a capital basis (where the LLP/LP itself realizes capital receipts) whereas a distribution from a company will almost certainly be regarded as income. These benefits should be balanced against investors being taxed on the vehicle's profits as they arise regardless of whether or not those profits are distributed. Companies can allow profits to be accumulated without any tax for an investor until those profits are realized.

Financing: Equity issuance, capital contributions and profit sharing

For investor syndicates, a private limited company often provides the most practical structure for holding investments. It allows the syndicate to issue shares to participating investors, create different share classes to reflect varying rights or economics, and onboard new members efficiently. LLPs do not issue shares; new capital typically arrives through admission of additional members with a defined right to receive a share of the LLP’s profits. LPs, by design, hinge on capital commitments and scheduled capital calls—built-in mechanics for managing liquidity, preferred returns, and carried interest

Conclusion: Aligning structure with investment strategy 

For investor syndicates, the choice of investment vehicle depends on the desired balance of control, liability, tax efficiency and administrative burden. Private Ltd Companies offer simplicity and flexibility for direct equity investments. LLPs provide a middle group with operational flexibility and tax transparency. LPs are ideal for more structured syndicates seeking centralised management and confidentiality.

DWF has the largest venture and growth capital group in the UK with over 85 lawyers in 10 offices, and supports investors and companies across several sectors including financial services, technology, media and telecommunications, life sciences and healthcare and real estate and infrastructure. If you have queries on any of the issues covered in this article please contact one of our experts.

Thank you to Matthew Kernohan and Fernando Martins for their contribution to the article.