Should you incorporate your firm as a Limited Liability Partnership?

by Net Lawman on December 5th, 2012

Most people who start a business usually consider whether they should incorporate as a company, but not whether a limited liability partnership (LLP) might be a better alternative. The advantages are disadvantages of structuring your business as an LLP as similar to those of structuring as a company.

Why structure as a limited liability business?

The primary advantage is in the name – limited liability: the owners of the company have their liability ‘capped’ to their investment in the partnership in the event that the business is sued or becomes insolvent.

In a traditional partnership, unless a partnership agreement states otherwise, all partners are able to conduct partnership business, and each is liable for the actions of every other. The implications are as follows: any partner can enter into a contract on behalf of the partnership without the consent of the other partners, regardless of what the contract is. For example, a partner may take out a business loan without telling other partners. If that contract…

    Continue Reading
Partnership Agreement

How partnership agreements can helps avoid business issues

by Net Lawman on December 3rd, 2012

All partnerships are governed by the Partnership Act 1890.A partnership agreement sets out how the business is controlled, how profits are shared, how assets (including intellectual property like trade names) are divided, and importantly, who is liable for business debts.
This agreement does so comprehensively, covering all the common situations that provide problems for partners working together.

    Continue Reading
Limited Liability Partnership

How to set up limited liability partnership in UK

by Net Lawman on December 3rd, 2012

A limited partnership includes:

one or more persons called general partners, who are liable for all debts and obligations of the firm; and
one or more persons called limited partners, who contribute a sum or sums of money as capital, or property valued at a stated amount. Limited partners are not liable for the debts and obligations of the firm beyond the amount contributed.

A legal body (e.g. company) or an individual may be a partner in a limited partnership, either as a general or as a limited partner. A person cannot be both a general and a limited partner at the same time.

There are some restrictions on the limited partners such as:

Limited partners may not draw out or receive back any part of their contribution to the partnership during its lifetime;
Limited partners may not take part in the management of the business or…

    Continue Reading
Partnership disputes

Avoid business disputes with partnerhip agreement

by Net Lawman on November 28th, 2012

Like everything in life, the business environment is also filled with extreme uncertainties. One type of business structure in the UK is the Partnership structure, where two or more persons go into business as partners, and agree on equal account-abilities, share of profits, and liabilities in the business. This equal share of responsibilities and account-abilities is pre-agreed upon in a Partnership Agreement, which must be well thought of and structured to encompass all possible seen and unforeseen situations.

However, as uncertainties go, Partnerships do not last forever. Often times, for one reason or another, your Partnership business may have to face changes, which may be friendly, bitter, planned or sudden.

Reasons for Partnership Disputes

Even a perfectly friendly partnership can take a turn for the worse when the parties get down to details, and the implications and impact of a situation…

    Continue Reading
buy sale

When does a business need a buy-sell/buyout agreement?

by Net Lawman on November 28th, 2012

We need a buy sell or buyout agreement when there are multiple owners of the business and there is a need to make sure what happens if one of them discontinues the partnership. A Buy-Sell Agreement is a contractual document that creates rules for what will happen when a business owner needs to transfer his or her interest in the company or when a business owner ceases to be an owner of the business for any reason. The Buy-Sale Agreement can either be a section of your company’s operating agreement or a separate document. These buy sell agreements are funded by life insurance and equity funds as well.

Certain events can cause the use of a Buy-Sell Agreement. These can include:

  • Death of a business owner.
  • Disability of a business owner.
  • Voluntary or involuntary termination of employment of a business owner.
  • Retirement of a business owner.
  • Loss of a professional license or imprisonment of business owner…
        Continue Reading