How are partners different from shareholders?


I get that LLPs have partners instead of shareholders. “Partner” is in the name, so it makes sense. But if both types of owners are members, what makes them different? Do partners need to do anything that shareholders do not?



The difference between an LLP partner and a limited company shareholder is:

  • A partner jointly owns and runs a limited liability partnership with at least one other person. The partners are jointly responsible for managing the business and contributing toward its success. Their liability is limited to what they invest in the LLP or agree to pay if the business can’t pay its bills.
  • A shareholder owns some or all of a limited by shares company by purchasing shares in the business. Shareholders are responsible for paying the value of their shares if the company can’t pay its bills, but they are not responsible for managing the company and contributing toward its success unless they are also directors.

Both are referred to as ‘members’ because they are the owners of businesses that have been incorporated at Companies House with limited liability.

2 years ago

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