If you are planning to go into business with one or more partners, you should consider entering into a partnership agreement or setting up a limited liability partnership (LLP). Our solicitors are experts in both advising, creating and managing partnerships and LLPs for business across the region.
Our expert legal team can assist with the following:
- Creating and managing a partnership/LLP
- Admitting new partners
- Varying the terms of a partnership
- Dissolving a partnership/LLP
- Transferring an existing business into or out of an LLP or partnership
Key features of an LLP
A limited liability partnership allows a partner to enjoy limited liability while also participating in the firm’s management. It is a body corporate, and therefore a legal entity separate from its members. An LLP is incorporated by registration at Companies House; it has unlimited capacity and can do anything that a legal person can do.
LLP members have limited liability in that, generally, they do not need to meet the LLP’s liabilities. However, in some circumstances, a member may have to contribute to the LLP’s assets. For example, if a member:
- Is guilty of misfeasance or falls within special clawback under the Insolvency Act 1986
- Must contribute by agreement between the members OR
- Is a sole member of the LLP trading as such for more than six months
Key features of a partnership
A partnership arrangement exists when two or more individuals collectively decide to run a business and those individuals will agree to share between them the profits which that business may generate and as well as any losses it may suffer. As to how any profits or losses are divided among the individuals will depend entirely on what is agreed between the parties at the time the partnership is formed.
We would strongly advise that a partnership agreement is drawn up to protect the interests of each partner as well as the partnership and to set out clearly matters such as the degree of involvement by each partner in the management and day to day operations of each partner as well as how profits and losses are to be accounted for and distributed.
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