Sometimes due to regulatory requirements or other factors incorporation in the normal way is not suitable for your business.  Additionally, some businesses begin as partnerships between colleagues and like-minded people, often informally.  It is important that it is understood that an unincorporated partnership is very similar to a sole trader in that the partners could be directly responsible for the companies losses and are not protected by law in the same way as limited companies.

Traditionally solicitors practices just like our own would have been partnerships where a number of like-minded solicitors set up practice together.  As time has evolved the company grows and the regulations change meaning that becoming incorporated becomes a necessary step to take.

Some other reasons to change are the death of a partner and the complications of bringing in a new partner to the existing partnership agreements for example.  Incorporating can give everyone the new opportunity to restructure the business, provide limited liability to the partners and secure the growth of the company together in a new and protected way.

Limited liability partnerships are similar in nature to a normal limited company.  Deciding whether an LLP or Ltd company is best for your business is an important step which you should take both legal advice on and speak to your accountants about.

We can work closely with partners and accountants to work out the best way to incorporate the business.

Key take away points:

  • An LLP protects the members (Partners) personal assets in ways a normal partnership agreement may not be able to.
  • An LLP is a separate legal entity unlike the partnership that precedes it.
  • Members can be added and removed by use of the existing mechanisms in the business rather than often outdated and irrelevant partnership agreements.
  • An LLP can consist of corporate members as well as individuals.
  • An LLP is more attractive to new partners/members than possibly an unlimited exposure to risk in a normal partnership.

Send us a message