The LLP was the vehicle of choice for most film schemes incorporated since 2001 because of the added flexibility created by the LLP's structure, the existence of limited liability to all members and the tax transparent structure. In addition, and unlike an LP, an LLP permits its members other than the general partner to actively participate in the running of the business of the partnership. However, as word of caution, the way in which investments in an LLP and the running of an LLP are treated for tax purposes by the Inland Revenue is constantly evolving, so that it is always advisable to receive up to date legal and taxation advice on the latest developments in setting up such schemes. In 2004 the Inland Revenue made substantial changes to the rules relating to Film schemes. Therefore, producers should seek professional advice to determine if this type of scheme is appropriate.
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