Annex 1: Minor changes in the law Change 8: Trading losses: restrictions: contribution to the firm in place of contribution to the trade: sections 56, 57, 58, 59, and 60 Contribution to an LLP
The source legislation provides that the contribution to an LLP is the greater of the amount which the company has contributed to it as capital (so far as it is not recoverable) and the amount of the company’s liability on a winding up (see section 118ZC(2) of ICTA).
But the total amount the company has at risk in an LLP is, in principle, the sum of what has been contributed as capital to the LLP and the additional amount that the company could be called on to meet in a winding up of the LLP.
The Act provides that a company’s contribution to an LLP takes account of the total amount at risk, namely any amounts contributed as capital to the LLP (see section 60(2)) and any further amounts for which the company is liable on a winding up (see section 60(7)).