Limited Liability Partnership
|Who controls it?||Partners|
|What is the governing document?||Partnership deed|
|Who is the regulator?||Companies House|
|Does it have limited liability?||Yes|
|What sources of finance are available?||Loans, Equity Finance, rarely grants|
|Is charitable status available?||No|
A limited liability partnership (LLP) retains the organisational flexibility of a partnership and is taxed as a partnership but members have the benefit of limited liability. It is a legal entity. It is a single tier structure (that is, the partners are the equivalent of directors of a company and shareholders combined). Two or more individual or corporate bodies that carry on a lawful business with a view to profit may form an LLP.
The members sign up to the incorporation document, or join by agreement with existing members. Individuals or corporate bodies may be members of an LLP. A person may cease to be a member of an LLP by death, dissolution, in accordance with an agreement with the other members or, in the absence of agreement, on ‘reasonable notice’ to the other members. The rights and duties of members have to be governed by agreement between members (and the LLP) or in the absence of any LLP agreement; there are default provisions for LLPs.
Members are liable in the winding up of an LLP up to the amount they have agreed (which can be nothing).
An LLP is governed by a partnership agreement which can be tailored to reflect a social purpose. It can also be a useful vehicle in a group structure. It cannot be a charity because it is established for the benefit of its members not for the benefit of the public.