LLPs: dispelling the myths

Mark Sharpley debunks some untruths about limited liability partnerships
LLPs are a way of organising a business and, in particular, legal practices. While the solicitors practice, “the business”, under LLP status is legally a body corporate, the partners limit their personal liability and avoid putting their personal assets at risk. This is not something that a member of a normal partnership can do. In addition they are no longer responsible for the acts of the other partners. The principal difference is that an LLP has the organisational flexibility of a partnership and is taxed as a partnership. In other respects it is very similar to a company.

Ownership

Two or more individuals or companies may form an LLP to carry on a profit-seeking business with a view to profit. LLPs are not available for activities such as non-profit-making activities.

Apart from allowing partners to limit their liability, probably the most significant difference between an LLP and a normal partnership is that an LLP can