Considerations for Partnerships and LLPs
There are some important aspects you must consider when you set up a partnership or LLP and these are dealt with and should be included in a properly drafted partnership agreement. These include:
- Capital and other financial matters;
- Partnerships assets and who owns them;
- Profit and losses;
- Relationship between the partners;
- The exit of partners (amicable and hostile exits should be considered);
- Duration of the partnership and when it should come to an end;
- Partner roles and responsibilities;
- Any restrictions on a parting member/partner.
A definitive Partnership or LLP Agreement is vital to protect all partners and ensure the smooth running of any business and can save time and costs should a dispute arise. It also facilitates business continuity in times of dispute. If you do not have a partnership agreement in place, there are certain default provisions of the Limited Liability Partnership Act 2000 that will apply to the LLP and the outdated Partnership Act 1890 in respect of Partnerships.
If you do not wish to rely on these statutory provisions which will simply dictate the position, then it is vital for you to have an agreement to govern the relationship between the members (a Members Agreement) or partners (Partnership Agreement). Furthermore, in the absence of any agreements, there is greater potential for dispute and disagreement between partners.
Our areas of specialism
In some instances, it may have been a few years since you had a Partnership Agreement drawn up and legislation may have moved on. We can review your agreement and update it where required and advise you (in conjunction with your accountant) of the best legal structure for your business.
- Partnership Agreements/LLP formation;
- Partnership/LLP conversions;
- Departures & restructuring;
- Acquisition & mergers & disposals of partnerships/LLPs;
- Liquidation & insolvency of partnerships/LLPs.
If you wish to discuss any of the above matters further then why not contact us for a FREE initial no obligation 30 minutes consultation with one of our commercial solicitors.
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