Does an LLP need a partnership agreement?

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I’d like to get an LLP together with a mate. We’re on pretty good terms, and I think we should be just fine without a partnership agreement. Is it okay for us to incorporate without one?

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There is no legal requirement to have a partnership agreement drawn up, but it is a terrible idea not to have one! Regardless of how good a relationship you and the other partner(s) have just now, it may not always be that way. In business, you really must prepare for all eventualities. A written agreement will enable you to do this and avoid costly disputes.

A partnership agreement is essentially a set of rules for running an LLP. It is an effective way to make sure everyone knows what they are expected to do, what they cannot do, how the business should operate and how disputes should be resolved. If any disagreements arise in the future, you can refer to the agreement for guidance.

If you do not have a current and effective agreement, the partnership will be subject to the implied terms set out in the Limited Liability Partnership Regulations 2001. These terms are adequate for some LLPs but entirely unsuitable for others.

a year ago
 

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