If you decide to trade as a limited liability partnership (or LLP) then unless you specifically agree otherwise in a LLP agreement, your rights and obligations as a member of the LLP will be as set out in the Limited Liability Partnership Act 2000 (LLP Act).

The LLP Act is only suitable for particular partnerships and in many instances its provisions will not provide the members with the rights that they wish to have nor the level of obligations that they wish their fellow members to be subject to.

For example unless an LLP agreement is entered into, pursuant to the LLP Act:

• all of the profits made by the LLP will be shared equally between the members of the LLP irrespective of their time and capital contributions
• any difference of opinion between the members can be decided by a majority of the members (except for a change in the nature of the LLP's business which requires the consent of all members)

These are just two of the problem that can arise as a result of failing to set out the members' rights and obligations in an LLP agreement.

Don't leave it until it is too late

It is often the case that an LLP agreement is not considered until a problem arises. Unfortunately, it is usually too late then for the terms of an LLP agreement to be agreed by the members.  

The best time to put a partnership agreement in place is at the time of setting up the LLP when relations between the members are amicable.

How we can help

Our corporate solicitors have experience in drafting LLP agreements for various types of businesses. They can help you to ensure that your intentions regarding your rights and obligations relating to the LLP are accurately implemented and that you understand what is happening. 

Contact us now

For further information or to arrange an appointment contact a member of the corporate team on 0115 9 100 200 or email corporate@actons.co.uk or fill in the contact form below.