Basic LLP Agreement

Basic LLP Agreement is a short, straightforward agreement for an LLP with simple arrangements between the members. It may suit a small business (or professional services firm) that wants a clear LLP structure without a long-form document.

It is derived from the long form LLP agreement and covers the main points in a simpler form.

What does Basic LLP Agreement do?

It sets out the core terms for establishing and running an LLP on an equal-membership basis, so the members’ agreed arrangements are recorded in writing.

What does Basic LLP Agreement cover?

• Equal capital contributions.
• Equal sharing of profits and losses.
• An expectation that all members will work full time in the business and manage it jointly.
• No power to expel a member unless there is unanimous written consent of all members.
• Appointment of two designated members.

When should you use Basic LLP Agreement?

Use this agreement where the LLP’s arrangements are straightforward and the members want a simple document that deals with the key practical points.

If you need a fuller and more sophisticated LLP agreement, a longer-form LLP agreement may be more appropriate.

ECCTA 2023

This template has been updated and amended to take into account the Economic Crime and Corporate Transparency Act 2023 (ECCTA). 

ECCTA has introduced a number of new requirements for companies which secondary legislation has applied to LLPs.

These changes include:

• an LLP must ensure that its registered office is situated at an appropriate address;
• an LLP must provide an email address with its next confirmation statement;
• tightening up on the choice of name an LLP may use, specifically any name that is designed to facilitate criminal purposes or which suggests a connection with a foreign government or contains computer code is not permitted;
• confirmation on incorporation that an LLP has been formed for a lawful purpose (which must be confirmed annually on the LLP's confirmation statement); 
• a person may not be a member of an LLP if they are disqualified from acting as a company director. If a member becomes disqualified, the members of the LLP are required to remove that member. Failure to do so is a criminal offence. This is particularly important for existing LLPs as there is no power to expel a member of an LLP under statute. The members of an LLP can do so only if the LLP agreement permits them to;
• identity verification for LLP members and PSCs (including on incorporation that each individual named as a member has had their identity verified); and
• that LLPs are no longer required to maintain local registers of members, members' residential addresses and PSCs, instead LLPs must notify Companies House (within 14 days) of any changes to registered information relating to LLPs, members and members' residential addresses.

Appropriate new clauses have been added to deal with these changes.

Tax

This template does not address tax issues and customers should seek their own tax advice in relation to any tax implications arising from this template.

Basic LLP Agreement is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.