Getting Started in Business

LLP

A limited liability partnership, or LLP, is similar in some ways to a standard partnership, except that the individual members have lower liabilities to any debts which may arise from running the business.

There are more administrative duties involved compared to the partnership business structure. In fact, an LLP is more similar to operating a limited company.

In terms of liability, the limited liability partnership is itself liable for debts run up in running the business, rather that the individual members of the LLP. As a result, LLPs are only recommended for profit-running businesses.

Individuals or existing businesses can be members of a limited liability partnership, and the LLP must have at least two members. The rights and responsibilities of all members would usually be laid out in a deed of partnership.

The LLP would typically select a designated member (or members) who would be responsible for maintaining communications with Companies House, preparing accounts and acting for the LLP if for some reason it is dissolved further down the line.

An LLP should draw up a deed of partnership at the time of formation - a legally binding agreement between members which lays out the rights and responsibilities of each party to the agreement. Alongside administrative details such as the names and addresses of members, the deed will also include details on the amount of capital each partner will inject into the business, what their individual roles and responsibilites will be in running the business and what would happen if a partner leaves the business.

For more information on how Harris Lipman can help, please email mail@harris-lipman.co.uk or call (020) 8446 9000.

 

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