The main purpose of the Limited Liability Partnership Act 2000 was to create a new form of legal entity known as a Limited Liability Partnership (LLP). The essential feature of an LLP is that it combines the organisational flexibility and tax status of a partnership with limited liability for its members.
Since its inception, many existing professional partnerships, such as solicitors, accountants and surveyors, have already chosen to incorporate as LLPs and, as the benefits of what the LLP can offer are now clearer, other business types of all sizes, both national and international, are now benefiting from registration.
For further information, or to discuss your particular requirements, please contact us on 0117 983 6600 or email Damian Wardingley at firstname.lastname@example.org.
Every LLP must have at least two Designated Members. In addition to the same rights and duties as any other member, these designated members also have extra responsibilities which include:
- appointing an auditor;
- signing and delivering accounts on behalf of all members;
- notifying the Registrar of any changes to the LLP, its personnel or status;
- preparing and filing an Annual Return document;
- acting on behalf of the LLP if it is wound up and dissolved
The LLP and its members should be governed by an agreement between the members; this agreement does not have to be filed with Companies House and in the absence of such an agreement the LLP will be governed by a default set of regulations under the Act. Our fees do not include the preparation of a tailored agreement; however we will supply a draft Agreement as part of our Professional LLP pack.
And for your reference:
Default Provisions for LLPs
(excerpted from Limited Liability Partnerships Regulations 2001)
The mutual rights and duties of the members and the mutual rights and duties of the limited liability partnership and the members shall be determined, subject to the provisions of the general law and to the terms of any limited liability partnership agreement, by the following rules:-
- All the members of the limited liability partnership are entitled to share equally in the capital and profits of the limited liability partnership.
- The limited liability partnership must indemnify each member in respect of payments made and personal liabilities incurred by him (a) in the ordinary and proper conduct of the business of the limited liability partnership (b) in or about anything necessarily done for the preservation of the business or property of the limited liability partnership.
- Every member may take part in the management of the limited liability partnership.
- No member shall be entitled to remuneration for acting in the business or management of the limited liability partnership.
- No person may be introduced as a member or voluntarily assign an interest in a limited liability partnership without the consent of all existing members.
- Any difference arising as to ordinary matters connected with the business of the limited liability partnership may be decided by a majority of the members, but no change may be made to the nature of the business of the limited liability partnership without the consent of all the members.
- The books and records of the limited liability partnership are to be made available for inspection at the registered office of the limited liability partnership or at such other place as the members think fit and every member of the limited liability partnership may when he thinks fit have access to and inspect and copy any of them.
- Each member shall render true accounts and full information of all things affecting the limited liability partnership to any member or his legal representatives.
- If a member, without the consent of the limited liability partnership, carries on any business of the same nature as and competing with the limited liability partnership, he must account for and pay over to the limited liability partnership all profits made by him in that business.
- Every member must account to the limited liability partnership for any benefit derived by him without the consent of the limited liability partnership from any transaction concerning the limited liability partnership, or from any use by him of the property of the limited liability partnership, name or business connection.
- No majority of the members can expel any member unless a power to do so has been conferred by express agreement between the members.