It will almost always be advisable for the partners of a Limited Liability partnership (LLP) to enter into a Limited liability partnership agreement in order to avoid the application of any inappropriate default provisions in the Limited Liability Partnerships Act 2000 (LLPA 2000) or to supplement the statutory provisions where they are insufficient.
Default provisions
The Limited Liability Partnerships Regulations 2001, SI 2001/1090 (LLPR 2001) set out default provisions that will apply to the operation of an LLP in the absence of any specific agreement to the contrary. These are as follows:
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all members share equally in the capital and Profits of the LLP (losses are not included in this provision as an LLP, as a body corporate separate from its members, bears its own losses)
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the LLP must indemnify any member for payments and liabilities incurred in the ordinary and proper conduct of the LLP’s business or in or about anything necessarily done for the preservation of the LLP’s business or property
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every member may take part in the management of the LLP’s business
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no
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Limited Liability definition
What does Limited Liability mean?
Arises due to the legal separation of a business entity from those who own it. The liability of the shareholders of a company limited by shares is limited to the amount unpaid, if any, on the shares held by them. This distinguishes companies from sole traders and general partnerships.
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