A limited liability partnership or LLP is a form of corporate body. It combines the advantages of a company (limited liability and separate legal personality) with the flexibility of operating as a partnership and being taxed as such.

Although particularly favoured by the professions, LLPs are also commonly used in commercial trading situations.

While there is no statutory requirement to have an LLP agreement, it is advisable to put an agreement in place.

This is because the 'default' regime, which applies where there is no formal agreement, is unlikely to meet all of the members' requirements.

The default rules strive to ensure that there is equality in terms of how the members share in profits and capital. This will not always be appropriate, and if the members wish to take unequal shares they must put in place a separate agreement.

The default rules also fail to make provision for matters such as the expulsion of members from the LLP, the obligations of outgoing members and commercial matters such as restrictive covenants on members.

A well drafted LLP agreement can help the LLP operate correctly from the outset, and can also contain mechanisms to assist the resolution of disputes between the members in the future. It is also essential if the members do not want to have equal shares in the LLP.

For more information on forming an LLP click here.

For more information on the default rules click here.

Our services include:

• Supply of a standard form LLP agreement
  
  
• Preparation of all necessary minutes and resolutions to approve the entering into of the agreement.

Next steps

Our services start at £250 + VAT (£293.75) for a standard form LLP members agreement. The agreement may be tailored for an additional fee. Download our information sheet and order form.

For more information on our LLP agreement service please contact our Corporate Legal Services team.

To form an LLP, please click here. .