Partnerships and Limited Liability Partnerships
Our team of experienced corporate solicitors provides a specialist service to advise on and draft Partnership Agreements and Limited Liability Partnerships and Agreements. As always, understanding the business and what is required is at the core of our work in advising which route to take.
In any business partnership, it is vital for its smooth running to ensure that the partnership agreement between all parties is clear and precise. This agreement is a contract that details the responsibilities of the partners (including the criteria for decision making), remuneration, levels of capital investment and also what happens if there is a dispute.
One of the disadvantages of the traditional business partnership model is that partners risk unlimited personal liability. In addition, this unlimited risk is borne between partners on a joint and several basis. This means that each partner is liable for the acts of all fellow partners.
As a result of this, the Limited Liability Partnership (LLP) has gained in popularity in more recent times. The difference between a partnership and an LLP is that the latter is a structure which gives the individual partners reduced personal responsibility for any of the business’s debts or liabilities. An LLP is a separate legal entity to its partners, and as such it is the LLP itself that is mainly responsible for any of the business’s liabilities and not the individual partners.
LLPs do have certain statutory filing obligations, however our advice is to always have a bespoke members’ agreement in place. This agreement stipulates the sharing of:
- Income and liabilities,
- Management of the business,
- Admissions to the LLP, and
- Retirement from the LLP.
We also advise on transferring a partnership into an LLP.
If you are looking for help and advice on partnerships and Limited Liability Partnerships, then please contact us or call us on +44 (0)121 214 2490 for a FREE initial discussion.