Limited Liability Partnerships (LLPs)
Reintroduced in April 2001 by the Limited Liability Partnership Act 2000
statutory creation offering limited liability
Well received by professional firms but also available to any type of business
Came in the wake of a number of scandals Enron many accountancy firms
fixing books of Enron to make it look like it was doing better than it was
sent shockwaves to professional firms prior to 2001 Act they were acting
as partnerships with unlimited liability and potentially bankruptcy Lobbied the
government to limit their lability → a lot of solicitors operate as LLPs
S.1(5) LLP Act states that the law of partnerships does not apply to LLP
o LLP Act provides for the creation of LLPs and is supplemented by
Limited Liability Partnership Regulations 2001 and Limited Liability
Partnerships (no.2) Regulations 2002
LLPs have a ‘legal personality’ separate legal entity no distinction with
partnerships
incorporated association Companies House forms
LLPS own the assets of the business and are liable for its debts.
Change in membership does not affect its continued existence if it was a
partnership and there was no provision to say otherwise, a change in membership
would dissolve it.
An LLP can do anything that a natural person can do, enter contracts, sue and be -
sued and hold property.
Like a general partnership, if the agreement is silent the default position is statutory
Limited Liability Partnership Act 2000
What is limited liability?
3rd parties who deal with an LLP are contracting with a distinct legal entity, not with
the partners as common law partners
If the LLP defaults on a debt then the 3rd parties recourse is with/against the LLP not
the individual partners
In a general partnership the partners and the partnership are one and the same.
Members of an LLP liability is limited to what is stated in LLP agreement
could be as little as £1
Creation
Register with the Registrar of Companies House using a form LL IN01 with the
relevant fee
Requirements:
o 2 or more persons associated with the business
o Name ends in LLP / limited liability Partnership
o Location of registered office
o Name and address (home and service) of the persons who are members of
the LLP
Registrar will issue a ‘certificate of incorporation’ certificate brings the LLP into
existence shouldn't enter into contracts or lease agreements until you have the
Reintroduced in April 2001 by the Limited Liability Partnership Act 2000
statutory creation offering limited liability
Well received by professional firms but also available to any type of business
Came in the wake of a number of scandals Enron many accountancy firms
fixing books of Enron to make it look like it was doing better than it was
sent shockwaves to professional firms prior to 2001 Act they were acting
as partnerships with unlimited liability and potentially bankruptcy Lobbied the
government to limit their lability → a lot of solicitors operate as LLPs
S.1(5) LLP Act states that the law of partnerships does not apply to LLP
o LLP Act provides for the creation of LLPs and is supplemented by
Limited Liability Partnership Regulations 2001 and Limited Liability
Partnerships (no.2) Regulations 2002
LLPs have a ‘legal personality’ separate legal entity no distinction with
partnerships
incorporated association Companies House forms
LLPS own the assets of the business and are liable for its debts.
Change in membership does not affect its continued existence if it was a
partnership and there was no provision to say otherwise, a change in membership
would dissolve it.
An LLP can do anything that a natural person can do, enter contracts, sue and be -
sued and hold property.
Like a general partnership, if the agreement is silent the default position is statutory
Limited Liability Partnership Act 2000
What is limited liability?
3rd parties who deal with an LLP are contracting with a distinct legal entity, not with
the partners as common law partners
If the LLP defaults on a debt then the 3rd parties recourse is with/against the LLP not
the individual partners
In a general partnership the partners and the partnership are one and the same.
Members of an LLP liability is limited to what is stated in LLP agreement
could be as little as £1
Creation
Register with the Registrar of Companies House using a form LL IN01 with the
relevant fee
Requirements:
o 2 or more persons associated with the business
o Name ends in LLP / limited liability Partnership
o Location of registered office
o Name and address (home and service) of the persons who are members of
the LLP
Registrar will issue a ‘certificate of incorporation’ certificate brings the LLP into
existence shouldn't enter into contracts or lease agreements until you have the
