If you are operating a business in the form of a partnership or a Limited Liability Partnership (‘LLP’), or intend to do so, it is important that the agreement between the partners or members is set out in a formal partnership or LLP agreement. Woodfines’ Company and Commercial team has a wealth of experience in advising partnerships and LLPs on the full spectrum of legal issues, including the drafting and review of such agreements.
Normally, the relationship between partners is governed by a partnership agreement which sets out the way in which the partnership will operate. Such a formal agreement is often necessary to ensure that the partnership is appropriate to modern business life and the needs of the partners. In the absence of a partnership agreement, The Partnership Act 1890 will imply certain terms into the business relationship whether or not the partners agree or are aware of the implied terms.
By way of example, the Partnership Act provides, in the absence of agreement to the contrary, that all of the profits made by a partnership will be shared equally between the partners irrespective of the time capital contributions.
Limited Liability Partnerships
Normally, the relationship between members is governed by an LLP agreement between the members which sets out the way in which the LLP will operate. Unless such an agreement is entered into, certain default provisions of the Limited Liability Partnership Act 2000 (the ‘LLP Act’) will operate to set out the rights and responsibilities of the members. In many instances, these provisions will not provide the members with the rights that they wish to have nor the level of obligations that they wish their fellow members to be subject to.
By way of example, under the LLP Act all of the profits made by an LLP will be shared equally between the members of the LLP irrespective of their time and capital contributions.
How Can Woodfines Help?
As well as providing effective partnership and LLP agreements and advice in respect of start-up, Woodfines’ Company Commercial team can provide ongoing support for the lifecycle of partnerships and LLPs. This support includes, but is not limited to:
- The drafting of terms of trading
- The variation of terms of partnership and LLP agreements
- LLP secretarial support, including the maintenance of statutory registers and filing documents with Companies House
- Assistance with the admittance of new partners and members
- Assistance with the exit or retirement of existing partners and the cessation of membership
- Delivering advice on commercial issues such as data protection, confidentiality and the protection of intellectual property
- Advice and assistance on e-commerce matters, such as website terms and conditions of use
- Transferring the business into a Limited Liability Partnership or other vehicle.
- Insolvency and dissolution matters
For further information, please contact a member of our Company Commercial team.