Partnerships and Limited Liability Partnerships

We have a wealth of experience in dealing with partnerships and the more recent hybrid LLPs.

Trading as a partnership can have inherent risks.  Each partner is personally liable for the liabilities of the partnership and personal assets can be at stake.  Partnership law is based on a brief and antiquated piece of legislation which is unsuitable for today’s business practices.  Without a proper agreement in place to regulate the relationship between the partners in the event of a dispute, the only way to resolve the issue of law is by dissolving the partnership.

We can prepare bespoke partnership agreements that can cover issues such as ownership of partnership assets, capital contributions, drawings, profit and loss sharing, retirement, resignation, incoming partners, bonuses, disciplinary action payment of tax, guarantees and so on, all of which need to be in place.

It is our experience that even business run between friends usually benefit from operating from a clear set of rules that will apply in the event that your partner has different views to you.

An LLP is a separate legal personality, capable of owning its own property and being liable for its own debts in the same manner as a limited company.  Its members also enjoy limited liability in the same way as shareholders in a limited company would.  However, it does not benefit from legislation that governs how the members should behave towards one another and to the LLP, unlike a limited company.  The relationship must therefore be documented in an LLP Members Agreement.  The agreement can include members’ rights and obligations, statutory filing and compliance, accounting requirements, taxation and insolvency provisions to name but a few.

For definitions please click on the relevant word.