Our expertise in partnership law enables us to advise you on the appropriate partnership structure for your business. We can also deal with issues such as partnership disputes, the expulsion of a partner or the dissolution of the partnership.
A traditional or general partnership is a relatively simple and flexible way for two or more people to own and run a profit-making business. However, the members of a general partnership have no financial protection. If the business falters, each partner is personally responsible for the debts of the partnership as a whole.
Limited liability partnerships ('LLPs') are more like companies. They are separate legal entities and provide the benefits of limited liability to their members, whilst allowing them the flexibility to organise their internal structure as a traditional partnership. The LLP will itself be liable to the full extent of its assets, but the liability of the members will be limited.
"Limited Partnerships" differ from traditional partnerships and LLPs. Whilst at least one general partner controls the company's day-to-day operations and is personally liable for business debts, there are also passive or "limited partners" who contribute capital or investment to the business but have minimal control over daily decisions and operations. In return, the personal liability of a limited partner is capped or "limited" to the amount of his contribution or investment and his personal assets cannot be touched. Limited Partnerships are usually set up to invest money in other businesses or in real estate.
Whatever the structure, we recommend that a clear partnership agreement is put in place to avoid costly disputes in the future. In the absence of an agreement, the statutory provisions of the Partnership Act 1890 or Limited Liability Partnership Act 2000 will apply by default, and these may not necessarily meet your needs. For example, under the default provisions, no majority may expel a partner and without all the partners' consent no changes may be made to the nature of the business nor may any new partners be introduced. A partnership agreement can adjust such provisions and deal with other matters such as the duration of the partnership, the initial capital contributions, division of profits and losses, management structure, retirement, dissolution, expulsion, restrictive covenants and termination of the partnership.
Contact our Specialist Partnerships, Limited Liability Partnerships & Limited Partnerships Solicitors
For further information or to speak to our expert partnerships, limited liability partnerships & limited partnerships solicitors please telephone us on 0207 387 2032 or complete our online enquiry form here.