Limited Liability Partnerships Flashcards
What are the legal requirements for a LLP?
LLP needs two or more members on incorporation; there must also be two designated members who are responsible for filing documents at Companies House
To incorporate, an LLP needs to file form LL IN01 at Companies House, with the applicable fee; no requirement to file an LLP agreement
Name must end with ‘LLP’ - similar restrictions on names for LLPs as apply to companies
Must have a registered office, which is the LLP’s address for service of official documents; must also have an ‘appropriate email address’ to receive emails sent by registrar
What are the designated members’ responsibilities?
Signing and filing the annual accounts with the Registrar
Appointing, removing and remunerating the auditors
Filing the annual confirmation statement
Sending notices to the Registrar of Companies, for example concerning a joining or departing member
Winding up the LLP
They owe a duty of reasonable care and skill to the LLP
What other duties or liabilities might members of an LLP have?
Members may be liable for misfeasance, fraudulent trading or wrongful trading and may be required to contribute to the assets of the insolvent LLP
Members owe fiduciary duties to the LLP itself, including a duty of good faith, a duty to account for any money received on behalf of the LLP and a duty to other members to render true accounts and full information on matters concerning the LLP
LLPs may be liable to 3rd parties, even if a partner has acted without actual authority, in the same way as a general partnership
What are two important registration requirements LLPs have, in regards to charges and change of members?
LLP can own property as legal owner and can grant floating charges, like companies. LLP must keep a register of charges, including all charges affecting the LLP’s property and floating charges
- LLPs are required to register charges with the Registrar of Companies
When a new member joins or a member leaves, Companies House must be informed within 14 days
Where the members do not make their own LLP agreement, what provisions will apply by default?
LLP Regulations default agreement has mirror provisions to PA 1890 in relation to income and profits (equal shares), decision-making (majority for most decisions), expulsion (can’t be done), and non-competition
No default provision as to losses, as they are borne by the LLP itself
Default rule is that every member may take part in the management of the LLP and they aren’t entitled to remuneration for taking part in management
Default - Changing the nature of the business and changing the terms of contract between the members can only be done with unanimous consent
Default – members can leave the LLP by giving reasonable notice to other members
