What is a Limited Liability Partnership?


Limited Liability Partnerships (or LLPs) are a hybrid entity offering limited liability but allowing members to organise themselves as in a traditional partnership.

An LLP member may be an equity member who receives a share of profits or a fixed share member who has a fixed share of profits.

Since LLP members are self-employed for tax purposes, they obtain the cash flow benefit of a delayed payment of tax compared to an employee taxed under PAYE and save the business the cost of employer’s National Insurance Contributions (NICs).

Each LLP member’s rights and obligations are contained in the LLP agreement, which is a written agreement covering matters such as:

  • profit-sharing;

  • management and decision-making;

  • admission of new members;

  • retirement and expulsion of members; and

  • the entitlements and obligations of outgoing members, including confidentiality obligations and restrictive covenants.

Although LLP members do not qualify for employment protection rights, they have similar rights to employees not to suffer unlawful discrimination on the grounds of race, sex, age, sexual orientation, religion or belief and disability.

Do you need help with Limited Liability Partnerships?

We can help, please call 020 3871 8442, email info@crestlegal.com or complete a free online enquiry

Crest Legal is the trading name for Crest Legal Limited. Crest Legal Limited is registered in England and Wales with company number 11078493, with its registered office at 86-90 Paul Street, London EC2A 4NE. Crest Legal Limited is a firm of solicitors which is authorised and regulated by the Solicitors Regulation Authority with SRA number 645425. 

 

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