Deed of Adherence to Basic LLP Agreement
This Deed of Adherence is compatible with the Simply-Docs Basic LLP Agreement and allows for a new member to be added to a LLP which is governed by the Basic LLP Agreement.
This template is created as a deed (rather than a simple agreement) to avoid problems that may occur as a result of any lack of consideration by any of the original members.
This deed works by binding the new member into the original LLP agreement, such that he/she undertakes to perform the same obligations as the original members, and has the same entitlements. The original members give him/her an indemnity against any losses arising before he/she joined the LLP.
The addition of a new member will change the percentage share of profits and losses for all members. This adjustment is handled by adding a new schedule which sets out the members’ (both original and new) capital contribution, profit share and monthly drawings.
The deed should be executed by ALL the members in the LLP, together with the joining member. The deed should be dated on the date that the new member joins the LLP. However please note that thought needs to be given to the date that the new member joins. For ease of accounting, profit shares and capital contributions this date should, if possible, be tied into the relevant LLP’s accounting reference date and made the date of the deed, unless interim accounts are being drawn up to bridge any potential time gap.
This deed of adherence does not address the potential tax consequences of a new member joining the LLP. Notification obligations may be required to HMRC. It is advisable to seek independent tax and accounting advice.
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