Negotiating a limited liability partnership agreement that supports your strategy and limits risk
Our team of corporate solicitors can support you with:
- Advice on the benefits of a limited liability partnership agreement and how this differs from a general partnership agreement or a limited partnership agreement. If there is no LLP agreement in place, or if the agreement is not comprehensively drafted, default statutory provisions will apply, and these may not be suitable for your business.
- Defining parameters of a LLP agreement. We’ll assess what rights or assets need protecting and clarify how payments and profits are allocated. We’ll also help set out members’ responsibilities and explicitly state what happens if things go wrong, the LLP goes insolvent, or you want to leave the LLP.
- Drafting the limited liability partnership agreement. We’ll draft the LLP agreement in a way that gives your business enough flexibility to support its growth and development.
- Payments and profit structures. We’ll help organise allocation of profits and obligations of continued payment or rescue funding.
- Asset purchases. We’ll advise on asset purchases to be held by the LLP and equally, asset disposals.
- Decision-making. Including how day to day decisions and long-term strategies will be made and by whom.
- Dispute resolution. We’ll provide you with the tools necessary to resolve disputes, should they arise, promoting a swift resolution.
- Intellectual property. We’ll advise on any intellectual property to be transferred into the LLP along with setting out clear provisions for ownership of IP by the LLP and its members.
- Negotiations with the other parties to the limited liability partnership agreement.
- Registration at Companies House.
What our clients say
We pride ourselves on delivering an excellent service for clients, but don’t just take our word for it.
As a University spin-out getting the right team of lawyers to support our emerging business was fundamental and the team are always available to provide us with the invaluable guidance and support we require.
My colleagues and I have found them to be adept at dealing with the variety of challenges facing early stage companies. They are a trusted source for sound, sensible advice and practical deal management.
Quite frankly I was stunned at the low cost of the service given the value it provided us.
Quick, concise and best of all reasonably priced
Over the years Harper James have helped us navigate complex legal issues and red tape, providing distilled options and legal consultancy that far exceeds the service levels we’ve previously experienced from more traditional law firms. The team act like our own in-house counsel so, regardless of which lawyer we work with, we feel supported and that they truly have our best interests at heart.
Always great to have HJ on hand
Essentials of a limited liability partnership agreement
Getting the right legal support when drafting a limited liability partnership agreement can help you avoid common pitfalls and get the business essentials right, first time.
Working with you to understand your business needs, we will help you answer the following questions when drafting a limited liability partnership agreement to facilitate long-term commercial benefit:
- Have the roles and responsibilities of the LLP members been clearly defined?
- Has ownership of any assets to be used in the business been clearly established? And what happens to the assets (or profits from assets) if the LLP terminates or the assets are sold?
- How will payments from or to the Limited liability partnership be structured and allocated? What can they be used for?
- What restrictions apply to the members of the LLP?
- Who makes the decisions in the LLP and are there any reserved matters or rights of veto?
- What happens when a member wants to join or leave the limited liability partnership?
- What happens if there is a deadlock in decision-making?
- Does the limited liability partnership agreement include any warranties?
- What will happen if things go wrong? Does the limited liability partnership agreement include any indemnities in respect of potential losses that may be suffered by each party?
- What remedies are provided under the agreement?
- Can the terms of the limited liability partnership agreement be varied by the members? If so, how?
- Do you need to set a duration of the limited liability partnership?
- What happens if the LLP goes into administration or becomes insolvent?
- Do members know who will fulfil the LLP’s tax obligations?
Advantages of a carefully drafted limited liability partnership agreement
A LLP is an entity that has a separate legal personality to its members and is governed by the Limited Liability Partnerships Act 2000. You can benefit from the flexibility of the partnership model and simultaneously protect LLP members by limiting their individual liability.
Protect your assets
Clearly document how assets owned by the limited liability partnership are to be treated and disposed of, so that each LLP member knows their rights.
Structure for decision-making
By creating a thorough and well documented decision-making structure, there will be no confusion as to the decision-making process. This will demonstrate good corporate governance to customers and suppliers and help you avoid accidental or unwanted liabilities for the business.
Limit risks to your business
Producing clear guidelines on risk allocation or to what extent members agree to be liable will help you avoid costly and time intensive dispute resolution processes.
A clear exit strategy
When being a member of the limited liability partnership is no longer commercially viable, having an exit strategy is of key importance. Being able to rely on well-documented provisions that clearly set out what happens when a member wants to leave the LLP can give you peace of mind that you are not making an overly onerous commitment.
Get clarity on your tax liability
An LLP is a separate legal entity from its members, but it is treated as a traditional partnership for the purposes of tax. LLP members are taxed as partners and so they are individually liable for tax on their share of the income or profits of the LLP. It is well worth documenting who is in charge of compliance with the LLP’s tax obligations to avoid penalties for late payments.
Who we help: Small, medium and large limited liability partnerships
We support a wide range of UK-based limited liability partnerships in commercial businesses where the creation and protection of a robust and profitable business model is crucial. We advise clients of all types, from start-ups to established market players.
Why choose Harper James Solicitors?
Our corporate solicitors have a wealth of experience in drafting limited liability partnership agreements and in advising LLPs in general. We can assist you with strategic analysis of your LLP, provide you with well-drafted documentation and support you with negotiations of your governing documents – from the commercial terms of your business to the more common legal protections that you might need.
Beyond providing you with corporate advice, we take a holistic approach to supporting you across all areas of business law. Our extensive experience helping businesses across the UK develop means we understand commercial challenges beyond just their legal implications – enabling us to provide practical advice and guidance to help you achieve your business goals, now and in the future.
Find out more about the team here:
Abby Watson is a corporate solicitor, specialising in private equity investments, mergers & acquisitions, EMI share schemes, corporate finance and governance and more.View profile
Adam Kudryl is a Partner and Corporate & Commercial Solicitor at Harper James Solicitors, specialising in strategic investments, acquisitions and sales.View profile
Corporate Solicitor & CEO
Toby Harper is the CEO & Founder of Harper James Solicitors, as well as a corporate & commercial solicitor. He specialises in venture capital and the tech sector.View profile
Stephen is an experienced corporate lawyer, with a career including time at DLA Piper and Pinsent Masons. He specialises in mergers and acquisitions and private equity work.View profile
Shubhu specialises in early-stage fund raisings, shareholder arrangements and M&A. Prior to joining Harper James she worked at Mills & Reeve and before that at Addleshaw Goddard and Slaughter and May.View profile
Jas is a corporate solicitor at Harper James Solicitors, advising on corporate governance, mergers & acquisitions, venture capital & investments.View profile
Michelle regularly advises business owners on corporate and commercial legal matters. She was partner in a regional firm and has also spent time in-house at a Higher Education business dealing with its research, innovation and knowledge exchange contracts.View profile
Our three transparent pricing packages are designed to give you the widest possible access to high-quality legal advice, whatever the size and nature of your business:
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Have legal peace of mind for £189 per month with additional support from £99 per hour.
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For businesses requiring 60+ hours of support a year, with prices equivalent to £99 per hour.
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