Limited Liability Partnership Agreement

This UK Limited Liability Partnership Agreement sets out the how the relationship between the partners is to be governed and includes clauses on profit sharing, decision making and what happens on dissolution.

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A UK Limited Liability Partnership is reasonably new trading vehicle and is a cross between a partnership and company (although it is more like a company). Unlike a partnership where partner’s losses can be unlimited, partners’ losses in a LLP are limited to the capital they introduced to the business. In return for this limited liability the LLP’s accounts must be filed at Companies House and therefore be open to public inspection.

There are lots of great tax reasons for using a LLP and you will need to speak to your tax adviser as to whether a LLP is the right vehicle for you.

This agreement sets out the how the relationship between the partners is to be governed and includes clauses on profit sharing, decision making and what happens on dissolution. The agreement also incorporates the legislation governing the management of Limited Liability Partnerships, in particular the requirements for designated members and for reporting annually to Companies House.

Among others, this form includes the following key provisions:
  • Name of Business: Identifies the Name of the business
  • Principal Place of Business: Identifies the principal place of business, this identifies the residence of the business for legal purposes
  • Capital Contribution: Identifies the amount of capital to be contributed
  • Profits and Losses: Describes how profits and losses will be shared among the partners
  • Drawings: Describes how the members shall receive monthly draws
  • Management: Clarifies the management of the partnership
  • Much more: Many more clauses such as meetings, voting, banking, insurance, retirement and even expulsions are included.
These UK Limited Liability Partnership forms have been created by UK lawyers for use in England and Wales.
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.











LIMITED LIABILITY PARTNERSHIP







This Packet Includes:
1. Information;
2. Step-by-Step Instructions; and
3. LIMITED LIABILITY PARTNERSHIP





Information
LIMITED LIABILITY PARTNERSHIP




Traditionally if you wished to conduct business then you would do so through one of the following mediums:

   Sole trader
   Partnership
   Limited liability company

Now there is a fourth medium; the Limited Liability Partnership (LLP).

To quickly summarise partners in a traditional partnership have unlimited liability. Shareholders in a company have their liability limited to the amount they paid for their shares.

In exchange for unlimited liability partners in a partnership can run their business broadly any way they choose and their business affairs can be conducted in private. In contrast a company must conduct its business according to the Companies Act and other legislation. Also a company must be transparent to its shareholders and the public. Details of the company and its officers must be filed at Companies House together with its accounts which is a public register.

Now there has been introduced the LLP; its purpose to provide the trader with the flexibility of a partnership but with the limited liability of a company.

Prospective business owners should seek detailed advice from an accountant and/or lawyer as to whether a LLP will be a tax efficient and acceptable medium to trade through. However there are a lot of “sexy” things you can do with a LLP.

LLPs are more akin to a company rather than a partnership. The main players are called Members. Some members may be deemed Designated Members. This would be the equivalent of a company director. The Designated Members will make decisions regarding general running of the LLP. You can also include a managing member who has day to day control of LLP.

The main advantage for trading through this medium is that the liability of the members is limited to the amount they invested as capital. In a partnership, any partner has unlimited liability.







As with all our agreements clear uncomplicated language has been used throughout and therefore the terms will be self explanatory. You will see throughout the agreement blank spaces or words contained within square brackets. These square brackets mean that this is an instruction to you and you will need to either fill in the missing information or delete or amend the wording as appropriate. Where you see the clause numbering within square brackets this means that you must check the clause numbering to ensure that the clause numbers referred to are still correct if you have changed or deleted any clauses of the agreement.


 Step-by-Step Instructions
LIMITED LIABILITY PARTNERSHIP



   

In addition to the above we would also draw your attention to the following:

   Clause 2   You will need to insert the nature of the LLP business and specify whether it will be subject to any rules and regulations of any professional body (eg the Law Society).

   Clause 3   Insert the name and registered office of the LLP here.

   Clause 4.1   The members will need to determine how much capital each will need to contribute to be entitled to a point in the business.

   Clause 4.4   If the members are to receive interest on their capital then the interest rate will need to be inserted here.

   Clause 5.2   The membership point maximum (if there is to be one) will need to be inserted here.

   Clause 6   In clause 6.1 the maximum amount of drawings should be inserted. Note clause 6.2 which provides for the Managing partner to adjust this maximum amount if he deems it necessary.

   Clause 10   This clause deals with the managing partner and the terms of his appointment.

   Clause 12   This clause deals with members meetings and the procedures to be adopted when voting on key issues. Please review carefully to ensure the clause meets with the members requirements.

   Clause 18   This clause sets out what members cannot do with the consent of the Managing Partner. This can be amended to without the consent of the other members. Please insert all figures where indicated in this clause.

   Clause 19.1    Read this clause carefully regarding the retirement of members and amend as necessary.




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LIMITED LIABILITY PARTNERSHIP AGREEMENT

B9011 Date:                  20
Parties:
(1)    [Name]
   of  [Address]
(2)   [Name]      
   of  [Address]
(3)   [Name]
   of [Address]
Operative provisions:
1.      Interpretation
1.1   In this agreement, unless the context otherwise requires, the following words and expressions have the meanings stated:
Accountants”  [________] of or such other firm of chartered accountants as the Designated Members appoint;
Accounting Date”  [________] in each year or such other date as the Designated Members determine;
Accounting Period”  [in the case of the first Accounting Period, the period between the commencement of the Limited Liability Partnership business and the first Accounting Date, and, for subsequent Accounting Periods,] a period commencing on the day following an Accounting Date and ending on the next Accounting Date;
Act” means the Limited Liability Partnerships Act 2000 and any regulations made under it;
Continuing Members”  the Members who continue to be members of the Limited Liability Partnership after a Succession Date;
Designated Member”  such Member or Members as are from time to time appointed to carry out such functions as are required to be carried out by designated members under the Act;
Former Member”  a person who has ceased to be a Member;
Managing Partner”  the Member occupying the office of managing partner in accordance with [clause 12];
Members”  the parties to this agreement and any other person who is admitted to the Limited Liability Partnership and agrees to be bound by the terms of this agreement (but excluding a Former Member) and references to a “Member” shall be construed accordingly;
Outgoing Member”  a Member who ceases to be a member of the Limited Liability Partnership;
Limited Liability Partnership”  the Limited Liability Partnership carried on by the Members under this agreement as varied by any supplemental agreement;
Points”  the points to which the Members are entitled under [clause 5];
Succession Date”  a date on which an Outgoing Member ceases, or is deemed under this agreement to cease, to be a Member.
1.2   Reference to a Member, Former Member or Outgoing Member (where the context admits) includes a reference to his personal representatives, estate, receiver or trustee in bankruptcy.
1.3   Reference to a statute or statutory provision includes a reference to that statute or statutory provision as amended, extended or reenacted.
1.4   Words denoting the singular number include the plural and vice versa.
1.5   Unless the context otherwise requires, a reference to any clause, subclause, paragraph or schedule is to a clause, subclause, paragraph or schedule of or to this agreement.
2.   B9013 Business of the limited liability partnership
2.1   The Members are in the [business] [practice] of _____________.
2.2   The Members shall at all times conform to the rules and regulations of _____________.
3.   B9014 Name and registered office
3.1   The Limited Liability Partnership business shall be carried on under the name [            ] LLP.
3.2   The registered office of the Limited Liability Partnership shall be [________] or such other place as is determined by the Members.


4.   Capital
4.1   The capital of the Limited Liability Partnership is £[________] for each Point (and pro rata for fractions of a Point) or such other amount as is determined by resolution of the Members. If the Members determine to increase the capital of the Limited Liability Partnership, each Member shall pay his share of the increase on the relevant resolution being passed or on such other date as the resolution specifies.
4.2   The capital of the Limited Liability Partnership shall belong to the Members in the proportions in which it has been contributed.
4.3   If a person is admitted as a Member of the Limited Liability Partnership or if the Points entitlement of a Member is increased, he shall, upon admission or upon the increase taking effect, contribute to the capital of the Limited Liability Partnership the amount applicable under [clause 4.1] for each Point or fraction of a Point to which he is entitled on admission or by which his Points entitlement is increased. If the Points entitlement of a Member is reduced, the Limited Liability Partnership shall repay to him upon the reduction taking effect a part of his capital pro rata to the reduction in his Points entitlement.
4.4   Each of the Members shall be entitled to interest at the rate of [________] per cent per annum on the amount of his share of the Limited Liability Partnership capital to be calculated on a daytoday basis and to be credited each year before the profits are divided.
5.   B9016 Profits
5.1   The profits of the Limited Liability Partnership for each Accounting Period (including capital profits or losses realised in the Period) shall belong to and be borne by the Members in proportion to the numbers of Points to which they are each entitled at the end of the Accounting Period.
5.2   The Points entitlement of each Member shall be increased by one Point at the beginning of each Accounting Period commencing after the date of this agreement but subject to a maximum entitlement of [________] Points for each Member. The Members by resolution may determine that, because of particular merit, a Member shall be entitled to an extra Point for one or more Accounting Periods but subject to the maximum entitlement mentioned above.
5.3   The balance of the profits of the Limited Liability Partnership of each Accounting Period, after taking into account drawings in anticipation of profits under [clause 5.1], shall be distributed amongst the Members in their due shares immediately after the signing of the accounts for that Period.
5.4   If in an Accounting Period the aggregate amount drawn out by a Member is found to exceed the amount of his share of the profits for the Period, he shall, immediately after the signing of the accounts for that Period, repay the excess.
6.   B9017 Drawings
6.1   Each Member shall be entitled to draw out of the Limited Liability Partnership funds for his own use every month, on account of his accruing share of the profits of the then current Accounting Period, the sum of £[________] for each Point to which he is entitled for that Accounting Period or such other sum as is determined by the Managing Partner. No sum shall, however, be drawn unless there is money in the Limited Liability Partnership bank account or there are banking facilities available for that purpose in excess of sums required for the current expenses of the Limited Liability Partnership.
6.2   The Managing Partner shall adjust the amount determined under [clause 6.1] in respect of each Accounting Period if and when he is of the opinion that, to achieve a fair distribution policy pending the finalisation of the Accounts for that Period, it would be desirable to do so.
7.   B9018 Advances to the limited liability partnership
7.1   If a Member, with the consent [in writing] of the other Members, advances a sum of money to the Limited Liability Partnership in excess of his due contribution to capital, the advance shall be a debt due from the Limited Liability Partnership to him and shall carry interest, calculated on a daytoday basis at the rate of [   ] per cent per annum and payable yearly on each Accounting Date whilst the advance remains outstanding and on repayment.
7.2   The sum advanced shall not be deemed to be an increase in the Members capital or entitle him to an increased share in the profits of the Limited Liability Partnership.
7.3   An advance made under [clause 7.1] shall (provided the funds are there so to do) be repaid, together with accrued interest, at the expiration of not less than [________] months notice in writing given by the Member who made the advance to the other Members or vice versa.
8.   B9019 Bankers
8.1   The bankers of the Limited Liability Partnership shall be [________] Bank plc or such other bankers as the Managing Partner determines.
8.2   All Limited Liability Partnership moneys (not required for current expenses) shall, as and when received, be paid into the Limited Liability Partnership bank account.
8.3   Limited Liability Partnership cheques shall require the signature of any two Members.
9.   B9020 Records and accounts
9.1   Proper books of account and entry as are required by the Act shall be kept and made by the Limited Liability Partnership.
9.2   [As soon as practicable after each Accounting Date, a balance sheet and profit and loss account as required by the Act shall be prepared of all the assets and liabilities of the Limited Liability Partnership on that Date and of all dealings and transactions of the Limited Liability Partnership during the Accounting Period ending on that Date. The balance sheet and profit and loss account shall be prepared and audited by the Accountant and shall be signed by the Designated Members on behalf of all the Members. When signed, they shall be binding on the Members except for any manifest error which has been identified within three calendar months after signature.]
9.3   [Each balance sheet and profit and loss account shall be agreed to and signed by all the Members and, when signed, shall be binding on all the Members except that, if any manifest error is detected and pointed out by any Member to the Managing Partner within three calendar months after signature, the error shall be rectified.]
9.4   Each Member shall be entitled to draw out of the Limited Liability Partnerships bank account the undrawn balance (if any) of his share of the profits shown in the profit and loss account. The balance not drawn by him shall be placed to the credit of his capital amount with the Limited Liability Partnership].

10.   Managing partner
10.1   The daytoday management of the Limited Liability Partnership shall be the responsibility of the Managing Partner.
10.2   The Managing Partner shall be elected for successive terms of three Accounting Periods. The first Managing Partner shall be [________] whose term of office shall end on  [________].
10.3   The election of a Managing Partner shall be by a majority vote of the Members and shall take place at the last meeting of the Members held under [clause 12.2] before his term of office begins. A Managing Partner whose term of office is about to expire shall be eligible for reelection.
10.4   A Managing Partner may be removed and replaced by a majority resolution of the Members. The new Managing Partner shall continue in office until the term of office of the Managing Partner he replaces would have expired.
10.5   When anyone or anything may be appointed or determined by the Managing Partner under this agreement, he or it may alternatively be appointed or determined by a majority resolution of the Members.
10.6   Where a Member is engaged in the management of the business of the Limited Liability Partnership he shall be entitled to receive such remuneration as the Members may agree.
11.   B9022 Designated members
The Members shall from time to time appoint such of their number as an appropriate person to perform the functions of Designated Members for the purposes of the Act.
12.   Meetings and voting
12.1   The Managing Partner, or Members having the right to at least 10 per cent of the total voting rights of the Members, may at any time call a meeting of the Limited Liability Partnership. If the purpose is to consider a resolution requiring the unanimous decision of the Members, at least [________] days notice in writing is required. For any other meeting, at least [________] days notice in writing is required.
12.2   A general meeting of the Members shall be convened at intervals of approximately six months as determined by the Managing Partner to consider the business and affairs of the Limited Liability Partnership.
12.3   Notices of meetings of the Limited Liability Partnership shall specify the place, day and hour of the meeting and shall contain a statement of the matters to be discussed.
12.4   The chairman of the meeting shall be the Managing Partner but he shall not be entitled to any casting vote by reason of being chairman.
12.5   All matters considered at a meeting of the Members or to be determined by the Members shall be decided by a majority vote except that the following matters shall require a unanimous resolution of all the Members [present, in person or by proxy]:
12.5.1   borrowing any sum in excess of £[________];
12.5.2   giving a guarantee;
12.5.3   opening a new branch office or closing an existing office;
12.5.4   increasing the capital of the Limited Liability Partnership;
12.5.5   introducing into the Limited Liability Partnership a new Member (whether profit sharing, salaried or otherwise); and
12.5.6   amending this agreement.
12.6   A Member may appoint another Member as his proxy to vote on his behalf on a resolution. To be effective, the proxy form must be given to the Managing Partner not less than [________] hours before the time for holding the meeting.
12.7   The quorum for a meeting shall be Members entitled to not less than [________] per cent of the total voting rights of the Members. If a quorum is not present within fifteen minutes of the time for which the meeting is convened, the meeting shall be cancelled.
12.8   Where a resolution is to be decided by a majority vote, each Member present in person or by proxy shall have one vote for each Point (and pro rata for fractions of a Point) to which he, and any Member for whom he is a proxy, is then entitled.
12.9   Minutes shall be taken of all meetings of Members and (subject to any agreed amendments) shall be approved and signed by the chairman of the next following meeting. The minutes, when signed, shall be binding on all the Members.
13.   B9024 Holidays
13.1   Each Member shall be entitled (in addition to public holidays) to holidays not exceeding in aggregate [________] weeks in each Accounting Period. Not more than ten consecutive working days holiday shall be taken at any one time without the prior consent of the Managing Partner.
14.   B9025 Absence
14.1   If, in any Accounting Period, a Member is absent from Limited Liability Partnership business as a result of illness or injury for more than [________] days in total, his entitlement to Points for the purpose of determining his share of profits for that Accounting Period (but not for determining his liability for losses) shall be reduced by a fraction of which the numerator is the number of excess days of absence and the denominator is 365.
15.   B9026 Motor cars
15.1   All cars required for the purposes of the Limited Liability Partnership business shall be purchased by or leased to the Limited Liability Partnership. The cost of all repairs, maintenance, insurance, VAT and tax shall be borne by the Limited Liability Partnership.
16.   B9027 Insurance
16.1   All buildings, machinery, office equipment and other assets of the Limited Liability Partnership of an insurable nature shall, at the cost of the Limited Liability Partnership, be kept insured to their full replacement value with reputable insurers approved by the Managing Partner. All insurance money received in the event of loss or damage shall, so far as possible, be applied in making good the loss or damage.
16.2   The Limited Liability Partnership shall maintain policies of insurance for such amounts as the Managing Partner determines in respect of employers liability, public liability, professional negligence and loss of profits consequent upon destruction of or damage to the Limited Liability Partnership premises.
B9028
17.   Good faith
17.1   Each Member shall at all times:
17.1.1   be just and faithful to the other Members in all matters relating to the Limited Liability Partnership and give a true account when reasonably required to do so by the Managing Partner;
17.1.2   devote his whole time and attention to the business of the Limited Liability Partnership and use his best skills and endeavours to carry it on for the benefit of the Limited Liability Partnership;
17.1.3   conduct himself in a proper and responsible manner; and
17.1.4   use his best endeavours to promote the Limited Liability Partnership business.
18.   B9029 Restrictions on members
18.1   No Member shall without the prior [written] consent of the Managing Partner:
18.1.1   engage directly or indirectly in any business other than that of the Limited Liability Partnership;
18.1.2   engage or (except for gross misconduct) dismiss any employee of the Limited Liability Partnership earning more than £[________] per annum;
18.1.3   employ any of the assets of the Limited Liability Partnership or pledge its credit otherwise than in the ordinary course of business and for the benefit of the Limited Liability Partnership;
18.1.4   compromise or compound or (except upon payment in full) release or discharge any debt due to the Limited Liability Partnership;
18.1.5   lend money or give credit on behalf of the Limited Liability Partnership or have any dealings with any person, firm or company with whom the Managing Partner has forbidden him to deal;
18.1.6   buy or contract for any goods, services or property on behalf of the Limited Liability Partnership involving an aggregate commitment of more than £[________] or lease any asset for an amount involving more than £[________] per annum or £[________] over the term of the lease;
18.1.7   give any guarantee on behalf of the Limited Liability Partnership;
18.1.8   enter into any bond or become bail, surety or security with or for any person, firm or company or do or knowingly cause or suffer to be done anything if, as a result, any Limited Liability Partnership property may be taken in execution or otherwise endangered;
18.1.9   [assign, mortgage or charge his share in the Limited Liability Partnership or] enter into Limited Liability Partnership with any other person, firm or company concerning his share in the Limited Liability Partnership.
18.2   The provisions of [clause 18.1], other than [subclauses 18.1.1, 18.1.8 and 18.1.9], shall not apply to the Managing Partner unless the other Members by a majority resolution direct.
B9030
19.   Retirement
19.1   Any Member may retire from the Limited Liability Partnership [at any time following his sixtieth birthday] on giving not less than [________] months notice in writing to the Managing Partner expiring on an Accounting Date [or on such earlier date as may be necessitated by medical or other reasons and agreed to by the Managing Partner]. The Member shall be deemed to retire on the expiry of the notice.
19.2   Each Member shall retire on the Accounting Date next following his sixtyfifth birthday unless he agrees, at the request of all of the Members, to remain as a Member for such further period as is agreed by all the Members.
20.   B9031 Expulsion
20.1   If a Member (the “defaulting Member”):
20.1.1   is unable to perform his duties as a Member by reason of illness, injury or other cause for a period of consecutive months or for an aggregate of more than months during any period of twelve months; or
20.1.2   is made bankrupt; or
20.1.3   becomes a patient under any statute relating to mental health; or
20.1.4   commits a grave breach or consistent breaches of this agreement; or
20.1.5   fails to pay any moneys owing by him to the Limited Liability Partnership within days of being requested in writing by the Managing Partner to do so; or
20.1.6   is guilty of conduct likely to have a serious adverse effect upon the Limited Liability Partnership business; or
20.1.7   absents himself from the business of the Limited Liability Partnership without proper cause and without the consent of the Managing Partner for more than [________] months in any period of twelve months;
then upon the Managing Partner (or, if the Managing Partner is the defaulting Member, the other Members) becoming aware of the circumstances the Managing Partner (or, as the case may be, the other Members) may by notice in writing determine the Limited Liability Partnership as far as it concerns the defaulting Member. The defaulting Member shall be deemed to have retired on the date of the notice.
20.2   The Members may by notice in writing signed by all of them (other than the one to whom the notice is addressed) request a Member to retire from the Limited Liability Partnership. If he does not retire within days after the notice is given, he shall at the expiration of that period be deemed to have retired.
21.   B9032 Outgoing members share
21.1   The provisions of Schedule 1 apply in relation to an Outgoing Member.
21.2   An Outgoing Member shall not be bound to make any contribution to the assets of the Limited Liability Partnership in the manner contemplated by clause 22.1 as and from [the third anniversary of] the date on which the Outgoing Member ceased to be a member of the Limited Liability Partnership.
22.   B9033 Winding up of the limited liability partnership
22.1   If the Limited Liability Partnership is wound up every present [and (subject to clause 21.2) past] Member is liable to contribute to the assets of the Limited Liability Partnership such amount as may be required (not exceeding £100) for payment of its debts and liabilities and the expenses of the winding up and for the adjustment of the rights of the contributories amongst themselves.
22.2   Upon the winding up of the Limited Liability Partnership the balance of the assets of the Limited Liability Partnership after discharging the liabilities of the Limited Liability Partnership shall be applied in paying to each Member:
22.2.1   any unpaid profits which are due to him;
22.2.2   his share of the Limited Liability Partnership capital;
22.2.3   his share of any balance in the same proportion as he was, at the date of determination, entitled to share the profits of the Limited Liability Partnership.
If the amount available is insufficient to discharge in full any payment to be made under the above subparagraphs, the payment shall be made to the Members pro rata to the amounts that they would have received had the amount been sufficient.
23.   Arbitration
23.1   Any dispute, difference or question which, either during the Limited Liability Partnership or afterwards, arises between the Members or with an Outgoing Member or Former Member in relation to this agreement or the Limited Liability Partnership, the matter shall be referred to a single arbitrator, agreed upon by the parties or nominated at the request of any party by the President of ___________. The provisions of the Arbitration Acts 1950 and 1979 shall apply to the arbitration.
IN WITNESS whereof the parties hereto have executed this agreement as a DEED on the date set out above

SIGNED and DELIVERED   )
as a DEED by the said         )   
[enter name] in the          )
presence of:               )   

Witness signature:
Witness Name:
Witness Address:

SIGNED and DELIVERED   )
as a DEED by the said         )   
[enter name] in the          )
presence of:               )   

Witness signature:
Witness Name:
Witness Address:

SIGNED and DELIVERED   )
as a DEED by the said         )   
[enter name] in the          )
presence of:               )   
Witness signature:
Witness Name:
Witness Address:






B9035 SCHEDULE 1
Supplemental provisions relating to an outgoing member
1.   Accounts to be prepared
Where a Member dies or ceases to be a Member for any other reason, a balance sheet as at the Succession Date and a profit and loss account for the period from the immediately preceding Accounting Date down to the Succession Date (together the “Termination Accounts”) shall be prepared by the Accountants as soon as practicable.
2.   Valuation of property
If so requested by the Outgoing Member or the Continuing Members within three months from the Succession Date, any freehold or leasehold property comprised in the Limited Liability Partnership property shall be valued as at the Succession Date by a valuer agreed upon by the Outgoing Member and the Continuing Members (or, in default of agreement, a valuer appointed by the Accountants). The expense of the valuation shall be borne as to half each by the Outgoing Member and by the Continuing Members.
3.   Value of workinprogress
In preparing the Termination Accounts the Accountants shall value all workinprogress at the Succession Date and provide for bad or doubtful debts, in accordance with the practice of the Limited Liability Partnership and the requirements of the Act.
4.   Outgoing members undrawn profits and capital
Following the preparation of the Termination Accounts [there shall be paid out of funds available for such payment to the Outgoing Member the following sums:] [the following sums shall be paid out of funds available for such payment to the Outgoing Member by [six] [halfyearly] instalments, the first of which shall be paid on completion of the Termination Accounts:]
4.1   any undrawn balance of the Outgoing Members share of the profits of the Limited Liability Partnership as at the Succession Date as shown by the Termination Accounts but after making provision for his share of the tax on those profits;
4.2   the amount shown standing to the credit of the Outgoing Members capital account in the Termination Accounts, after adding or (as the case may be) deducting the same proportion as the amount by which the value assigned to any property in a valuation made under paragraph 2 exceeds or falls short of the value assigned to that property in the Termination Accounts as the proportion of the Limited Liability Partnership capital to which the Outgoing Member was entitled immediately prior to the Succession Date.
5.   Payment of interest and acceleration
5.1   Each instalment payable under paragraph 4 shall bear interest until paid at a rate of [________] per cent per annum, calculated from the date of completion of the Termination Accounts until actual payment.
5.2   [If an instalment is in arrear for more than [________], the whole amount, or the balance of the instalment outstanding, shall immediately become payable together with interest calculated under paragraph 5.1.]
6.   Books of account and other documents
The Outgoing Member shall deliver to the Continuing Members all books of account, records, letters and other documents in his possession relating to the Limited Liability Partnership business. During the period of 18 months following his retirement, the Outgoing Member or his duly authorised agent shall be permitted to inspect by appointment the books of account, records, letters and other documents of the Limited Liability Partnership business insofar as they relate to any period ending on or before the Succession Date but he may not remove any of them from the premises of the Limited Liability Partnership.
7.   Restriction
The Outgoing Member shall not:
7.1   during the period of years after the Succession Date, act for or solicit, either by himself or as the partner or employee of any other person, firm or company, any client of the Limited Liability Partnership practice at the Succession Date [other than his relatives or family business owned or controlled by his relatives or any client for whom he acted solely in an honorary capacity]; or
7.2   at any time practise as a [________], either by himself or as the partner or employee of any person, firm or company under any firm name similar to; or
7.3   during the period of [________] years after the Succession Date and within a radius of miles from [any] Limited Liability Partnership premises practise as a [________] either by himself or as the partner or employee of any person, firm or company.


Number of Pages19
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#32251
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.











LIMITED LIABILITY PARTNERSHIP







This Packet Includes:
1. Information;
2. Step-by-Step Instructions; and
3. LIMITED LIABILITY PARTNERSHIP





Information
LIMITED LIABILITY PARTNERSHIP




Traditionally if you wished to conduct business then you would do so through one of the following mediums:

   Sole trader
   Partnership
   Limited liability company

Now there is a fourth medium; the Limited Liability Partnership (LLP).

To quickly summarise partners in a traditional partnership have unlimited liability. Shareholders in a company have their liability limited to the amount they paid for their shares.

In exchange for unlimited liability partners in a partnership can run their business broadly any way they choose and their business affairs can be conducted in private. In contrast a company must conduct its business according to the Companies Act and other legislation. Also a company must be transparent to its shareholders and the public. Details of the company and its officers must be filed at Companies House together with its accounts which is a public register.

Now there has been introduced the LLP; its purpose to provide the trader with the flexibility of a partnership but with the limited liability of a company.

Prospective business owners should seek detailed advice from an accountant and/or lawyer as to whether a LLP will be a tax efficient and acceptable medium to trade through. However there are a lot of “sexy” things you can do with a LLP.

LLPs are more akin to a company rather than a partnership. The main players are called Members. Some members may be deemed Designated Members. This would be the equivalent of a company director. The Designated Members will make decisions regarding general running of the LLP. You can also include a managing member who has day to day control of LLP.

The main advantage for trading through this medium is that the liability of the members is limited to the amount they invested as capital. In a partnership, any partner has unlimited liability.







As with all our agreements clear uncomplicated language has been used throughout and therefore the terms will be self explanatory. You will see throughout the agreement blank spaces or words contained within square brackets. These square brackets mean that this is an instruction to you and you will need to either fill in the missing information or delete or amend the wording as appropriate. Where you see the clause numbering within square brackets this means that you must check the clause numbering to ensure that the clause numbers referred to are still correct if you have changed or deleted any clauses of the agreement.


 Step-by-Step Instructions
LIMITED LIABILITY PARTNERSHIP



   

In addition to the above we would also draw your attention to the following:

   Clause 2   You will need to insert the nature of the LLP business and specify whether it will be subject to any rules and regulations of any professional body (eg the Law Society).

   Clause 3   Insert the name and registered office of the LLP here.

   Clause 4.1   The members will need to determine how much capital each will need to contribute to be entitled to a point in the business.

   Clause 4.4   If the members are to receive interest on their capital then the interest rate will need to be inserted here.

   Clause 5.2   The membership point maximum (if there is to be one) will need to be inserted here.

   Clause 6   In clause 6.1 the maximum amount of drawings should be inserted. Note clause 6.2 which provides for the Managing partner to adjust this maximum amount if he deems it necessary.

   Clause 10   This clause deals with the managing partner and the terms of his appointment.

   Clause 12   This clause deals with members meetings and the procedures to be adopted when voting on key issues. Please review carefully to ensure the clause meets with the members requirements.

   Clause 18   This clause sets out what members cannot do with the consent of the Managing Partner. This can be amended to without the consent of the other members. Please insert all figures where indicated in this clause.

   Clause 19.1    Read this clause carefully regarding the retirement of members and amend as necessary.




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LIMITED LIABILITY PARTNERSHIP AGREEMENT

B9011 Date:                  20
Parties:
(1)    [Name]
   of  [Address]
(2)   [Name]      
   of  [Address]
(3)   [Name]
   of [Address]
Operative provisions:
1.      Interpretation
1.1   In this agreement, unless the context otherwise requires, the following words and expressions have the meanings stated:
Accountants”  [________] of or such other firm of chartered accountants as the Designated Members appoint;
Accounting Date”  [________] in each year or such other date as the Designated Members determine;
Accounting Period”  [in the case of the first Accounting Period, the period between the commencement of the Limited Liability Partnership business and the first Accounting Date, and, for subsequent Accounting Periods,] a period commencing on the day following an Accounting Date and ending on the next Accounting Date;
Act” means the Limited Liability Partnerships Act 2000 and any regulations made under it;
Continuing Members”  the Members who continue to be members of the Limited Liability Partnership after a Succession Date;
Designated Member”  such Member or Members as are from time to time appointed to carry out such functions as are required to be carried out by designated members under the Act;
Former Member”  a person who has ceased to be a Member;
Managing Partner”  the Member occupying the office of managing partner in accordance with [clause 12];
Members”  the parties to this agreement and any other person who is admitted to the Limited Liability Partnership and agrees to be bound by the terms of this agreement (but excluding a Former Member) and references to a “Member” shall be construed accordingly;
Outgoing Member”  a Member who ceases to be a member of the Limited Liability Partnership;
Limited Liability Partnership”  the Limited Liability Partnership carried on by the Members under this agreement as varied by any supplemental agreement;
Points”  the points to which the Members are entitled under [clause 5];
Succession Date”  a date on which an Outgoing Member ceases, or is deemed under this agreement to cease, to be a Member.
1.2   Reference to a Member, Former Member or Outgoing Member (where the context admits) includes a reference to his personal representatives, estate, receiver or trustee in bankruptcy.
1.3   Reference to a statute or statutory provision includes a reference to that statute or statutory provision as amended, extended or reenacted.
1.4   Words denoting the singular number include the plural and vice versa.
1.5   Unless the context otherwise requires, a reference to any clause, subclause, paragraph or schedule is to a clause, subclause, paragraph or schedule of or to this agreement.
2.   B9013 Business of the limited liability partnership
2.1   The Members are in the [business] [practice] of _____________.
2.2   The Members shall at all times conform to the rules and regulations of _____________.
3.   B9014 Name and registered office
3.1   The Limited Liability Partnership business shall be carried on under the name [            ] LLP.
3.2   The registered office of the Limited Liability Partnership shall be [________] or such other place as is determined by the Members.


4.   Capital
4.1   The capital of the Limited Liability Partnership is £[________] for each Point (and pro rata for fractions of a Point) or such other amount as is determined by resolution of the Members. If the Members determine to increase the capital of the Limited Liability Partnership, each Member shall pay his share of the increase on the relevant resolution being passed or on such other date as the resolution specifies.
4.2   The capital of the Limited Liability Partnership shall belong to the Members in the proportions in which it has been contributed.
4.3   If a person is admitted as a Member of the Limited Liability Partnership or if the Points entitlement of a Member is increased, he shall, upon admission or upon the increase taking effect, contribute to the capital of the Limited Liability Partnership the amount applicable under [clause 4.1] for each Point or fraction of a Point to which he is entitled on admission or by which his Points entitlement is increased. If the Points entitlement of a Member is reduced, the Limited Liability Partnership shall repay to him upon the reduction taking effect a part of his capital pro rata to the reduction in his Points entitlement.
4.4   Each of the Members shall be entitled to interest at the rate of [________] per cent per annum on the amount of his share of the Limited Liability Partnership capital to be calculated on a daytoday basis and to be credited each year before the profits are divided.
5.   B9016 Profits
5.1   The profits of the Limited Liability Partnership for each Accounting Period (including capital profits or losses realised in the Period) shall belong to and be borne by the Members in proportion to the numbers of Points to which they are each entitled at the end of the Accounting Period.
5.2   The Points entitlement of each Member shall be increased by one Point at the beginning of each Accounting Period commencing after the date of this agreement but subject to a maximum entitlement of [________] Points for each Member. The Members by resolution may determine that, because of particular merit, a Member shall be entitled to an extra Point for one or more Accounting Periods but subject to the maximum entitlement mentioned above.
5.3   The balance of the profits of the Limited Liability Partnership of each Accounting Period, after taking into account drawings in anticipation of profits under [clause 5.1], shall be distributed amongst the Members in their due shares immediately after the signing of the accounts for that Period.
5.4   If in an Accounting Period the aggregate amount drawn out by a Member is found to exceed the amount of his share of the profits for the Period, he shall, immediately after the signing of the accounts for that Period, repay the excess.
6.   B9017 Drawings
6.1   Each Member shall be entitled to draw out of the Limited Liability Partnership funds for his own use every month, on account of his accruing share of the profits of the then current Accounting Period, the sum of £[________] for each Point to which he is entitled for that Accounting Period or such other sum as is determined by the Managing Partner. No sum shall, however, be drawn unless there is money in the Limited Liability Partnership bank account or there are banking facilities available for that purpose in excess of sums required for the current expenses of the Limited Liability Partnership.
6.2   The Managing Partner shall adjust the amount determined under [clause 6.1] in respect of each Accounting Period if and when he is of the opinion that, to achieve a fair distribution policy pending the finalisation of the Accounts for that Period, it would be desirable to do so.
7.   B9018 Advances to the limited liability partnership
7.1   If a Member, with the consent [in writing] of the other Members, advances a sum of money to the Limited Liability Partnership in excess of his due contribution to capital, the advance shall be a debt due from the Limited Liability Partnership to him and shall carry interest, calculated on a daytoday basis at the rate of [   ] per cent per annum and payable yearly on each Accounting Date whilst the advance remains outstanding and on repayment.
7.2   The sum advanced shall not be deemed to be an increase in the Members capital or entitle him to an increased share in the profits of the Limited Liability Partnership.
7.3   An advance made under [clause 7.1] shall (provided the funds are there so to do) be repaid, together with accrued interest, at the expiration of not less than [________] months notice in writing given by the Member who made the advance to the other Members or vice versa.
8.   B9019 Bankers
8.1   The bankers of the Limited Liability Partnership shall be [________] Bank plc or such other bankers as the Managing Partner determines.
8.2   All Limited Liability Partnership moneys (not required for current expenses) shall, as and when received, be paid into the Limited Liability Partnership bank account.
8.3   Limited Liability Partnership cheques shall require the signature of any two Members.
9.   B9020 Records and accounts
9.1   Proper books of account and entry as are required by the Act shall be kept and made by the Limited Liability Partnership.
9.2   [As soon as practicable after each Accounting Date, a balance sheet and profit and loss account as required by the Act shall be prepared of all the assets and liabilities of the Limited Liability Partnership on that Date and of all dealings and transactions of the Limited Liability Partnership during the Accounting Period ending on that Date. The balance sheet and profit and loss account shall be prepared and audited by the Accountant and shall be signed by the Designated Members on behalf of all the Members. When signed, they shall be binding on the Members except for any manifest error which has been identified within three calendar months after signature.]
9.3   [Each balance sheet and profit and loss account shall be agreed to and signed by all the Members and, when signed, shall be binding on all the Members except that, if any manifest error is detected and pointed out by any Member to the Managing Partner within three calendar months after signature, the error shall be rectified.]
9.4   Each Member shall be entitled to draw out of the Limited Liability Partnerships bank account the undrawn balance (if any) of his share of the profits shown in the profit and loss account. The balance not drawn by him shall be placed to the credit of his capital amount with the Limited Liability Partnership].

10.   Managing partner
10.1   The daytoday management of the Limited Liability Partnership shall be the responsibility of the Managing Partner.
10.2   The Managing Partner shall be elected for successive terms of three Accounting Periods. The first Managing Partner shall be [________] whose term of office shall end on  [________].
10.3   The election of a Managing Partner shall be by a majority vote of the Members and shall take place at the last meeting of the Members held under [clause 12.2] before his term of office begins. A Managing Partner whose term of office is about to expire shall be eligible for reelection.
10.4   A Managing Partner may be removed and replaced by a majority resolution of the Members. The new Managing Partner shall continue in office until the term of office of the Managing Partner he replaces would have expired.
10.5   When anyone or anything may be appointed or determined by the Managing Partner under this agreement, he or it may alternatively be appointed or determined by a majority resolution of the Members.
10.6   Where a Member is engaged in the management of the business of the Limited Liability Partnership he shall be entitled to receive such remuneration as the Members may agree.
11.   B9022 Designated members
The Members shall from time to time appoint such of their number as an appropriate person to perform the functions of Designated Members for the purposes of the Act.
12.   Meetings and voting
12.1   The Managing Partner, or Members having the right to at least 10 per cent of the total voting rights of the Members, may at any time call a meeting of the Limited Liability Partnership. If the purpose is to consider a resolution requiring the unanimous decision of the Members, at least [________] days notice in writing is required. For any other meeting, at least [________] days notice in writing is required.
12.2   A general meeting of the Members shall be convened at intervals of approximately six months as determined by the Managing Partner to consider the business and affairs of the Limited Liability Partnership.
12.3   Notices of meetings of the Limited Liability Partnership shall specify the place, day and hour of the meeting and shall contain a statement of the matters to be discussed.
12.4   The chairman of the meeting shall be the Managing Partner but he shall not be entitled to any casting vote by reason of being chairman.
12.5   All matters considered at a meeting of the Members or to be determined by the Members shall be decided by a majority vote except that the following matters shall require a unanimous resolution of all the Members [present, in person or by proxy]:
12.5.1   borrowing any sum in excess of £[________];
12.5.2   giving a guarantee;
12.5.3   opening a new branch office or closing an existing office;
12.5.4   increasing the capital of the Limited Liability Partnership;
12.5.5   introducing into the Limited Liability Partnership a new Member (whether profit sharing, salaried or otherwise); and
12.5.6   amending this agreement.
12.6   A Member may appoint another Member as his proxy to vote on his behalf on a resolution. To be effective, the proxy form must be given to the Managing Partner not less than [________] hours before the time for holding the meeting.
12.7   The quorum for a meeting shall be Members entitled to not less than [________] per cent of the total voting rights of the Members. If a quorum is not present within fifteen minutes of the time for which the meeting is convened, the meeting shall be cancelled.
12.8   Where a resolution is to be decided by a majority vote, each Member present in person or by proxy shall have one vote for each Point (and pro rata for fractions of a Point) to which he, and any Member for whom he is a proxy, is then entitled.
12.9   Minutes shall be taken of all meetings of Members and (subject to any agreed amendments) shall be approved and signed by the chairman of the next following meeting. The minutes, when signed, shall be binding on all the Members.
13.   B9024 Holidays
13.1   Each Member shall be entitled (in addition to public holidays) to holidays not exceeding in aggregate [________] weeks in each Accounting Period. Not more than ten consecutive working days holiday shall be taken at any one time without the prior consent of the Managing Partner.
14.   B9025 Absence
14.1   If, in any Accounting Period, a Member is absent from Limited Liability Partnership business as a result of illness or injury for more than [________] days in total, his entitlement to Points for the purpose of determining his share of profits for that Accounting Period (but not for determining his liability for losses) shall be reduced by a fraction of which the numerator is the number of excess days of absence and the denominator is 365.
15.   B9026 Motor cars
15.1   All cars required for the purposes of the Limited Liability Partnership business shall be purchased by or leased to the Limited Liability Partnership. The cost of all repairs, maintenance, insurance, VAT and tax shall be borne by the Limited Liability Partnership.
16.   B9027 Insurance
16.1   All buildings, machinery, office equipment and other assets of the Limited Liability Partnership of an insurable nature shall, at the cost of the Limited Liability Partnership, be kept insured to their full replacement value with reputable insurers approved by the Managing Partner. All insurance money received in the event of loss or damage shall, so far as possible, be applied in making good the loss or damage.
16.2   The Limited Liability Partnership shall maintain policies of insurance for such amounts as the Managing Partner determines in respect of employers liability, public liability, professional negligence and loss of profits consequent upon destruction of or damage to the Limited Liability Partnership premises.
B9028
17.   Good faith
17.1   Each Member shall at all times:
17.1.1   be just and faithful to the other Members in all matters relating to the Limited Liability Partnership and give a true account when reasonably required to do so by the Managing Partner;
17.1.2   devote his whole time and attention to the business of the Limited Liability Partnership and use his best skills and endeavours to carry it on for the benefit of the Limited Liability Partnership;
17.1.3   conduct himself in a proper and responsible manner; and
17.1.4   use his best endeavours to promote the Limited Liability Partnership business.
18.   B9029 Restrictions on members
18.1   No Member shall without the prior [written] consent of the Managing Partner:
18.1.1   engage directly or indirectly in any business other than that of the Limited Liability Partnership;
18.1.2   engage or (except for gross misconduct) dismiss any employee of the Limited Liability Partnership earning more than £[________] per annum;
18.1.3   employ any of the assets of the Limited Liability Partnership or pledge its credit otherwise than in the ordinary course of business and for the benefit of the Limited Liability Partnership;
18.1.4   compromise or compound or (except upon payment in full) release or discharge any debt due to the Limited Liability Partnership;
18.1.5   lend money or give credit on behalf of the Limited Liability Partnership or have any dealings with any person, firm or company with whom the Managing Partner has forbidden him to deal;
18.1.6   buy or contract for any goods, services or property on behalf of the Limited Liability Partnership involving an aggregate commitment of more than £[________] or lease any asset for an amount involving more than £[________] per annum or £[________] over the term of the lease;
18.1.7   give any guarantee on behalf of the Limited Liability Partnership;
18.1.8   enter into any bond or become bail, surety or security with or for any person, firm or company or do or knowingly cause or suffer to be done anything if, as a result, any Limited Liability Partnership property may be taken in execution or otherwise endangered;
18.1.9   [assign, mortgage or charge his share in the Limited Liability Partnership or] enter into Limited Liability Partnership with any other person, firm or company concerning his share in the Limited Liability Partnership.
18.2   The provisions of [clause 18.1], other than [subclauses 18.1.1, 18.1.8 and 18.1.9], shall not apply to the Managing Partner unless the other Members by a majority resolution direct.
B9030
19.   Retirement
19.1   Any Member may retire from the Limited Liability Partnership [at any time following his sixtieth birthday] on giving not less than [________] months notice in writing to the Managing Partner expiring on an Accounting Date [or on such earlier date as may be necessitated by medical or other reasons and agreed to by the Managing Partner]. The Member shall be deemed to retire on the expiry of the notice.
19.2   Each Member shall retire on the Accounting Date next following his sixtyfifth birthday unless he agrees, at the request of all of the Members, to remain as a Member for such further period as is agreed by all the Members.
20.   B9031 Expulsion
20.1   If a Member (the “defaulting Member”):
20.1.1   is unable to perform his duties as a Member by reason of illness, injury or other cause for a period of consecutive months or for an aggregate of more than months during any period of twelve months; or
20.1.2   is made bankrupt; or
20.1.3   becomes a patient under any statute relating to mental health; or
20.1.4   commits a grave breach or consistent breaches of this agreement; or
20.1.5   fails to pay any moneys owing by him to the Limited Liability Partnership within days of being requested in writing by the Managing Partner to do so; or
20.1.6   is guilty of conduct likely to have a serious adverse effect upon the Limited Liability Partnership business; or
20.1.7   absents himself from the business of the Limited Liability Partnership without proper cause and without the consent of the Managing Partner for more than [________] months in any period of twelve months;
then upon the Managing Partner (or, if the Managing Partner is the defaulting Member, the other Members) becoming aware of the circumstances the Managing Partner (or, as the case may be, the other Members) may by notice in writing determine the Limited Liability Partnership as far as it concerns the defaulting Member. The defaulting Member shall be deemed to have retired on the date of the notice.
20.2   The Members may by notice in writing signed by all of them (other than the one to whom the notice is addressed) request a Member to retire from the Limited Liability Partnership. If he does not retire within days after the notice is given, he shall at the expiration of that period be deemed to have retired.
21.   B9032 Outgoing members share
21.1   The provisions of Schedule 1 apply in relation to an Outgoing Member.
21.2   An Outgoing Member shall not be bound to make any contribution to the assets of the Limited Liability Partnership in the manner contemplated by clause 22.1 as and from [the third anniversary of] the date on which the Outgoing Member ceased to be a member of the Limited Liability Partnership.
22.   B9033 Winding up of the limited liability partnership
22.1   If the Limited Liability Partnership is wound up every present [and (subject to clause 21.2) past] Member is liable to contribute to the assets of the Limited Liability Partnership such amount as may be required (not exceeding £100) for payment of its debts and liabilities and the expenses of the winding up and for the adjustment of the rights of the contributories amongst themselves.
22.2   Upon the winding up of the Limited Liability Partnership the balance of the assets of the Limited Liability Partnership after discharging the liabilities of the Limited Liability Partnership shall be applied in paying to each Member:
22.2.1   any unpaid profits which are due to him;
22.2.2   his share of the Limited Liability Partnership capital;
22.2.3   his share of any balance in the same proportion as he was, at the date of determination, entitled to share the profits of the Limited Liability Partnership.
If the amount available is insufficient to discharge in full any payment to be made under the above subparagraphs, the payment shall be made to the Members pro rata to the amounts that they would have received had the amount been sufficient.
23.   Arbitration
23.1   Any dispute, difference or question which, either during the Limited Liability Partnership or afterwards, arises between the Members or with an Outgoing Member or Former Member in relation to this agreement or the Limited Liability Partnership, the matter shall be referred to a single arbitrator, agreed upon by the parties or nominated at the request of any party by the President of ___________. The provisions of the Arbitration Acts 1950 and 1979 shall apply to the arbitration.
IN WITNESS whereof the parties hereto have executed this agreement as a DEED on the date set out above

SIGNED and DELIVERED   )
as a DEED by the said         )   
[enter name] in the          )
presence of:               )   

Witness signature:
Witness Name:
Witness Address:

SIGNED and DELIVERED   )
as a DEED by the said         )   
[enter name] in the          )
presence of:               )   

Witness signature:
Witness Name:
Witness Address:

SIGNED and DELIVERED   )
as a DEED by the said         )   
[enter name] in the          )
presence of:               )   
Witness signature:
Witness Name:
Witness Address:






B9035 SCHEDULE 1
Supplemental provisions relating to an outgoing member
1.   Accounts to be prepared
Where a Member dies or ceases to be a Member for any other reason, a balance sheet as at the Succession Date and a profit and loss account for the period from the immediately preceding Accounting Date down to the Succession Date (together the “Termination Accounts”) shall be prepared by the Accountants as soon as practicable.
2.   Valuation of property
If so requested by the Outgoing Member or the Continuing Members within three months from the Succession Date, any freehold or leasehold property comprised in the Limited Liability Partnership property shall be valued as at the Succession Date by a valuer agreed upon by the Outgoing Member and the Continuing Members (or, in default of agreement, a valuer appointed by the Accountants). The expense of the valuation shall be borne as to half each by the Outgoing Member and by the Continuing Members.
3.   Value of workinprogress
In preparing the Termination Accounts the Accountants shall value all workinprogress at the Succession Date and provide for bad or doubtful debts, in accordance with the practice of the Limited Liability Partnership and the requirements of the Act.
4.   Outgoing members undrawn profits and capital
Following the preparation of the Termination Accounts [there shall be paid out of funds available for such payment to the Outgoing Member the following sums:] [the following sums shall be paid out of funds available for such payment to the Outgoing Member by [six] [halfyearly] instalments, the first of which shall be paid on completion of the Termination Accounts:]
4.1   any undrawn balance of the Outgoing Members share of the profits of the Limited Liability Partnership as at the Succession Date as shown by the Termination Accounts but after making provision for his share of the tax on those profits;
4.2   the amount shown standing to the credit of the Outgoing Members capital account in the Termination Accounts, after adding or (as the case may be) deducting the same proportion as the amount by which the value assigned to any property in a valuation made under paragraph 2 exceeds or falls short of the value assigned to that property in the Termination Accounts as the proportion of the Limited Liability Partnership capital to which the Outgoing Member was entitled immediately prior to the Succession Date.
5.   Payment of interest and acceleration
5.1   Each instalment payable under paragraph 4 shall bear interest until paid at a rate of [________] per cent per annum, calculated from the date of completion of the Termination Accounts until actual payment.
5.2   [If an instalment is in arrear for more than [________], the whole amount, or the balance of the instalment outstanding, shall immediately become payable together with interest calculated under paragraph 5.1.]
6.   Books of account and other documents
The Outgoing Member shall deliver to the Continuing Members all books of account, records, letters and other documents in his possession relating to the Limited Liability Partnership business. During the period of 18 months following his retirement, the Outgoing Member or his duly authorised agent shall be permitted to inspect by appointment the books of account, records, letters and other documents of the Limited Liability Partnership business insofar as they relate to any period ending on or before the Succession Date but he may not remove any of them from the premises of the Limited Liability Partnership.
7.   Restriction
The Outgoing Member shall not:
7.1   during the period of years after the Succession Date, act for or solicit, either by himself or as the partner or employee of any other person, firm or company, any client of the Limited Liability Partnership practice at the Succession Date [other than his relatives or family business owned or controlled by his relatives or any client for whom he acted solely in an honorary capacity]; or
7.2   at any time practise as a [________], either by himself or as the partner or employee of any person, firm or company under any firm name similar to; or
7.3   during the period of [________] years after the Succession Date and within a radius of miles from [any] Limited Liability Partnership premises practise as a [________] either by himself or as the partner or employee of any person, firm or company.


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