How much money do partners need to guarantee?

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When you become a partner at an LLP, how much money does each partner need to guarantee? I would really just want to know whether there was a minimum guarantee. Ideally, there would be no guarantee at all! But I’m told there is one.

Answers

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LLP members do not have to provide a financial guarantee to the business unless they collectively agree that this should be obligatory. Instead, each member contributes capital when the business is set up.

There is no maximum or minimum capital contribution requirement. It is simply decided between the members how much they should each put into the LLP, so this will vary greatly from business to business.

This capital contribution is the limit of each member’s financial liability for the LLP’s debts, unless the business becomes insolvent through negligence or wrongful trading. In which case, the members may be required to contribute toward the LLP’s assets to settle its debts.

a year ago
 

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