Limited Liability Partnership Agreement

While there is no statutory requirement for a Limited Liability Partnership to have a written agreement, it is recommended that every practice or firm has a Limited Liability Partnership Agreement. This template can be used to set out the terms of an LLP.

A Limited Liability Partnership (LLP) is a corporate business vehicle that gives the benefits of limited liability while allowing members flexibility in organising their internal structure in a way that is similar to a traditional partnership.

What does this agreement do?

It records the members’ agreed terms for how the LLP will operate, including the internal arrangements between members.

Incorporation and constitutional position

Since April 2001 it has been possible to incorporate LLPs. LLPs are incorporated by completing form LL IN01 and delivering it to Companies House together with the appropriate fee.

Unlike limited companies, LLPs do not have a memorandum or articles of association. LLPs do not need to provide a copy of their Limited Liability Partnership Agreement to Companies House.

ECCTA 2023

This template has been updated and amended to take into account the Economic Crime and Corporate Transparency Act 2023 (ECCTA). From 4 March 2024, regulations were published which applied the first company law reforms set out in the ECCTA to LLPs. Most of these mirror corresponding changes for companies.

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; and
• 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.

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

Tax

This template includes only very minimal tax provisions. Customers should seek their own tax advice as to any tax implications arising from this template.

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