There is no legal requirement to have an LLP agreement in place, particularly if profits are divided equally between members. However, many partnerships prefer to have one and we can provide you with a draft agreement that you can amend to suit the structure you have in mind.

As the name suggests, an LLP is a partnership. Therefore it needs at least two partners. This raises issues of trust; if one partner falls out with the other and leaves then the LLP is dissolved unless another partner can be introduced. This is easily overcome with sleeping partners or corporate partners but it could still be considered as a potential drawback, therefore ensuring a comprehensive partnership agreement is in place is vital.

The legal requirements to prepare and publish annual accounts add to the administrative burden. Additionally, certain profit distributions to members in high grossing LLPs will need to be disclosed on the public record, removing a certain element of privacy and confidentiality.

The members also enjoy some degree of protection from the liabilities of the LLP, so long as they do not act fraudulently or trade wrongfully. This level of liability is limited to the amount they have invested; they cannot lose more than this.

Even though the LLP has its own separate legal identity, dealings with third parties, for example banks, may still require the members to provide their own personal guarantees, much in the same manner as these guarantees apply to directors of limited companies.

These legal requirements also extend to the members who must, like limited company officers, behave and act within the confines of the law. Failure can result in prosecution and future disqualification from being a member or director in another business.

There is no legal requirement to have an LLP agreement in place, particularly if profits are divided equally between members. However, many partnerships prefer to have one and we can provide you with a draft agreement that you can amend to suit the structure you have in mind.

As the name suggests, an LLP is a partnership. Therefore it needs at least two partners. This raises issues of trust; if one partner falls out with the other and leaves then the LLP is dissolved unless another partner can be introduced. This is easily overcome with sleeping partners or corporate partners but it could still be considered as a potential drawback, therefore ensuring a comprehensive partnership agreement is in place is vital.

The legal requirements to prepare and publish annual accounts add to the administrative burden. Additionally, certain profit distributions to members in high grossing LLPs will need to be disclosed on the public record, removing a certain element of privacy and confidentiality.

The members also enjoy some degree of protection from the liabilities of the LLP, so long as they do not act fraudulently or trade wrongfully. This level of liability is limited to the amount they have invested; they cannot lose more than this.

Even though the LLP has its own separate legal identity, dealings with third parties, for example banks, may still require the members to provide their own personal guarantees, much in the same manner as these guarantees apply to directors of limited companies.

These legal requirements also extend to the members who must, like limited company officers, behave and act within the confines of the law. Failure can result in prosecution and future disqualification from being a member or director in another business.