make your free llp agreement

limited liability partnership agreement

this agreement is made as a deed on the date of the last signature below (the "agreement").

between the persons listed in schedule 1 (the "initial members").

background

1. the initial members wish to enter into a limited liability partnership under the limited liability partnerships act 2000.
2. this agreement sets out how the llp (as defined below) will be established and how the initial members will manage their relationship as llp members.

the initial members agree that: 

meanings

1. these words and phrases have defined meanings:

   accounting reference date	in each year;
   accounting year	a calendar year ending on the accounting reference date;
   accounts	means the profit and loss account and balance sheet of the llp drawn up in accordance with clauses below;
   act	the limited liability partnerships act 2000;
   auditors	the llp's auditors from time to time;
   bank	;
   business	the profession, trade or business of  to be carried on by the llp or any other business decided under this agreement;
   business day	a day other than a saturday, a sunday or a public holiday in england and wales;
   capital share	a member's share of the capital of the llp shown in any balance sheet;
   contribution	any money paid or assets transferred to the llp by a member as a capital contribution;
   companies act 2006	the provisions of the companies act 2006 applied to llps under regulations made under the act;
   confidential information	all information of a confidential nature (however recorded or preserved) concerning the llp, a member (or former member) or their respective businesses (including details of customers, clients, suppliers, plans, intentions, market opportunities, operations, processes, product information, know-how, designs, trade secrets or software) and the terms of this agreement;
   current account	the members' accounts with the llp, showing (i) profits payable to members (ii) shares of losses allocated to members and (iii) any drawings of members;
   designated member	a member who is a "designated member" of the llp under the act;
   drawings	sums drawn by a member on account of anticipated profits of the llp and any other sums paid or assets used for the member's personal benefit by the llp (other than for any expenses provided for in this agreement) .
   exit date	the date a member retires, is deemed to retire or is expelled from the llp;
   expenditure limit	£;
   initial members	means the parties to this agreement (other than the llp) as listed in schedule 1;
   intellectual property	all patents, rights to inventions, copyright and neighbouring and related rights, moral rights, trademarks, service marks, business names and domain names, goodwill, rights in designs, rights in computer software, database rights, confidential information (including trade secrets and know-how) and all other intellectual and industrial property and similar rights, whether registered or unregistered, and including (a) all renewals or extensions of these rights and (b) all applications and rights to apply for and be granted these rights which subsist in any part of the world;
   leaving member	a member who has retired, been deemed to retire or been expelled from the llp;
   llp	the limited liability partnership incorporated under the name and registered at companies house with number ;
   members	the initial members and any other additional persons admitted as members  of the llp in accordance with this agreement at any time;
   members' resolution	a decision taken by members the value of whose capital shares together exceed 50% of the overall capital when the decision is taken;
   name	or another name from time to time registered by the llp at companies house;
   payment date	the  day of each calendar month or, if not a business day, the business day immediately following;
   profit share	a member's agreed proportion of any profits or losses of the llp;
   start date	the date of incorporation of the llp;
   tax	any income tax, capital gains tax or national insurance contribution payable by any member arising from their status as a member of the llp, their share of the profits of the llp or the proceeds from the sale of any llp assets.

2. in this agreement, unless the context means a different interpretation is needed:
   1. including means "including without limitation";
   2. words denoting the singular include the plural and vice versa, and words denoting any gender include all genders;
   3. a person includes firms, companies, government entities, trusts and partnerships;
   4. a party means a party to this agreement and includes its assignees and successors in title and, in the case of an individual, to their estate and personal representatives;
   5. reference to a paragraph or schedule is to a paragraph or schedule of or to this agreement (and the schedules form part of this agreement);
   6. reference to a statute or statutory provision includes any modification of or amendment to it, and all statutory instruments or orders made under it; and
   7. reference to writing or written includes faxes and email but not any other type of electronic communication.
3. the headings in this document are for convenience only and do not affect the interpretation of this agreement.

preliminaries

registration

1. the llp was incorporated under the act on .
2. the llp's certificate of incorporation issued under the act will be kept at the registered office of the llp.

commencement and duration

1. this agreement shall take effect on the start date.
2. the llp will carry on the business.
3. the llp will continue until wound up in line with the provisions of the act.
4. the llp will on registration be deemed to ratify and assume responsibility for any contract entered into by a member prior to the registration of the llp for the benefit of the llp and with the express or implied consent of the other members. the llp will indemnify members against all claims, liabilities and costs of such contracts.

name and registered office

1. the llp's registered office will be ,  ,  .
2. the members can change the name and/or the registered office of the llp by unanimous agreement and must notify companies house if they do so.

place of business

1. the business will initially be carried on from   the registered office.

designated members

1. each member will be a designated member.
2. a designated member can resign as a "designated member" (but will remain a member of the llp) on notice to the llp and the other members. any notification which means the number of designated members falls below two will not take effect until the members have appointed a new designated member to fill the vacancy.

members' initial contributions and shares

1. on the start date, or as otherwise agreed, each initial member must make an initial contribution as set out in schedule 1. the contribution must be:
   1. paid in cash, and/or
   2. with the agreement of all the other members, a contribution of assets.
2. on the start date, each initial member's profit share is the proportion against their name in schedule 1.

accounting and financial matters

property and assets

1. the llp owns absolutely all property and equipment (including computers and ancillary equipment, office equipment, furniture, books and stationery) and all intellectual property held or created by the llp to carry on the business which has been paid for by the llp, contributed to the llp by a member or otherwise accrued to the llp.
2. the members have no individual rights in the property and assets of the llp other than by virtue of their entitlement to such capital distribution as may be due to them under this agreement or following liquidation of the llp.
3. members must record the llp's interest in any property held by them on its behalf using a declaration of trust or other acknowledgement. the llp will indemnify the relevant member(s) against all liability relating to that property after the start date.
4. members must promptly notify the llp of all intellectual property which they have created (or partly created) and which relates to the business or can be used in the business. all this intellectual property will vest in the llp automatically on creation (and if it does not, the relevant member(s) will hold it on trust for the llp). members must, at the llp's sole expense, promptly do everything and sign all documents necessary to transfer ownership of this intellectual property to the llp and enable the llp to enforce its intellectual property.

accounts

1. the members must maintain accounting records giving a true and fair view of the business, the state of affairs and profit and loss of the llp.
2. the accounting records must be kept at the llp's registered office (or any other place the members agree) and must be open to inspection by the members during normal business hours on business days in accordance with the companies act 2006.
3. the llp's annual accounts must be:
   1. accompanied by the auditors' report (unless the llp is exempt from audit);
   2. sent to and approved by the members;
   3. signed by a designated member on behalf of all the members; and
   4. filed at companies house.
4. unless the llp is exempt from audit under the companies act 2006:
   1. the designated members can appoint and reappoint the auditors under the companies act 2006, fix their remuneration and remove them from office; and
   2. the llp's annual accounts will be audited and settled by the auditors.
5. the members can by unanimous agreement change the llp's accounting reference date and the designated members must notify any change to companies house.

banking arrangements

1. the llp will open a bank account with the bank.
2. all money and payments received by or on behalf of the llp will be paid promptly into the llp's bank account and all securities for money will be promptly deposited in the llp's name with the bank.
3. all cheques or instructions for the electronic transfer of money from any account of the llp with the bank will be in the llp's name and can be drawn or given:
   1. for amounts up to and including the expenditure limit, by any designated member; and
   2. for amounts in excess of the expenditure limit, by two designated members.

   in the case of instructions for electronic transfer, written confirmation of those instructions will be signed by the authorising designated member(s).

capital

1. the members can from time to time require some or all of the members to make a further contribution needed for the business but cannot require members to contribute any additional capital on the llp's insolvency
2. if a member makes a contribution after the start date they will acquire a new capital share or increase their existing capital share by an amount equal to the amount or value of that contribution and their profit share will be set or adjusted as agreed by the members.
3. a member can make a contribution by payment to the llp or by transfer from their current account.
4. the members will share any profits of a capital nature in proportion to their contributions.
5. no member is entitled to any interest on the amount of their capital share unless agreed by the members.

profits and losses

1. the members will allocate the profits and losses of the llp between themselves:
   1. as soon as they have approved the annual accounts for the relevant accounting year; and
   2. in proportion to the profit shares set out in schedule 1 or as otherwise unanimously agreed, with the appropriate proportionate reduction for any member who joined the llp during the relevant accounting year.
2. all members are responsible for calculating and accounting for their own tax and shall, within any time requested by the llp or auditors, supply the information requested for the purposes of such calculation and shall promptly submit all returns required by the hm revenue & customs.
3. if any losses to be debited to a member are greater than the value of their current account, the balance must be deducted from their capital share. if any sums are to be debited against a member when their current account and their capital share are both exhausted, then the sum must be set-off against any other monies owed to them by the llp or, if none or insufficient for that set-off, the balance can be set off against any future credits due from the llp to the member.
4. for the avoidance of doubt, any losses allocated to a member cannot exceed the amount of their aggregate contributions and members do not have to pay any sums to the llp in respect of any unsatisfied element of these debits.

drawings

1. on each payment date, each member can draw a sum on account of their share of the llp's profits as the members reasonably calculate, having allowed for the llp's ongoing working capital needs.
2. any further payments or any transfer of assets to or on behalf of any member will only be made or transferred if agreed by the members.
3. if the annual accounts show that in the relevant accounting year any member drew more than their share of the llp's profits for that accounting year, that member must repay the excess immediately, together with interest on the excess at a rate of % above the bank's base rate at the time.

duties and entitlements

members' obligations and duties

1. each member must at all times:
   1. devote all their time and attention to the business except when on holiday, on leave as described in the paragraph below (maternity, parental and family leave), or when incapacitated because of illness, injury or another serious cause;
   2. not engage in any business other than the business or accept (other than in a voluntary or honorary capacity) any office or appointment unless the engagement is agreed by the members;
   3. not benefit from the use of the name, the property, or the business connection of the llp unless agreed by the members;
   4. conduct themself in a proper and responsible manner and use their best skill and all reasonable endeavours to promote the business;
   5. comply with all statutes, regulations, professional standards and other provisions applying to the conduct of the business;
   6. show the utmost good faith to the llp;
   7. promote the interests of the llp for the benefit of the members; and
   8. account to the llp for any profit derived from any business, office or appointment accepted by them in breach of this agreement, or any personal benefit derived by them from the use of the name, the property or the business connection of the llp in breach of this agreement.

confidentiality

1. except as set out in the following paragraphs, the members must not at any time disclose any confidential information to any other person or use for it any purpose other than the performance of their obligations as members. this obligation will continue to bind a member after they stop being a member.
2. the obligation of confidentiality in the previous paragraph does not apply to information that is or becomes generally available to the public (other than as a result of its disclosure by a member in breach of this agreement).
3. a member can disclose confidential information to:
   1. a governmental, regulatory or other authority if disclosure is required by law, court order or a duty imposed by a regulatory authority;
   2. his professional advisors; or
   3. the professional advisers of the llp.

holiday

1. in each calendar year, each member is entitled to  days' holiday on business days, to be taken at times agreed with the other members and having regard to the needs of the business at that time.

maternity, parental and family leave

1. members are permitted the maternity, parental leave and family leave to which they would have been entitled under the employment rights act 1996 if they were employees of the llp with more than one year's continuous service.

expenses

1. each member is entitled to claim back out-of-pocket expenses properly incurred by them in connection with the business on provision of a receipt and vat invoice where appropriate.
2. the members can decide to place upper limits on any category or categories of expenses which can be claimed.

management

meetings

1. the business will be managed by the members.
2. meetings of the members will be held at least  times a year and members must use all reasonable efforts to attend.
3. meetings of the members can be called by   not less than  members. 
4. not less than  days' notice of the meeting must be given to all those entitled to attend, but a meeting can be convened at shorter notice if all the members agree in writing.
5. each meeting notice must specify the time, date and venue of the meeting and outline the matters to be discussed.
6. meetings will be held at the llp's registered office unless another venue is agreed by all the members in writing.
7. members may attend a meeting by telephone or video conferencing if all the members agree in writing.
8. at the beginning of the meeting the members present will appoint a designated member to be chairman for that meeting who will  have a casting vote.
9. the quorum for a meeting of the members is  members.
10. no business will be conducted at a meeting unless a quorum is present in person or, if agreed by all the members, by telephone or video conferencing. if a quorum is not present within 30 minutes of the time appointed, or if during a meeting a quorum ceases to be present, the meeting will be adjourned until a time and date agreed by the members unanimously in writing.
11. minutes of each meeting will be prepared, approved by the members at the next meeting and signed by the chairman as evidence of the proceedings.
12. a member who has an interest in any business to be transacted at a meeting will count towards the quorum but can only vote on such business after declaring their interest.

decision making

1. other than the matters set out in the following paragraphs, all decisions of the members are made by a members' resolution.
2. proxy voting is  permitted.
3. a decision on any of the following matters must be taken with the agreement of all the members:
   1. a change in the nature of the business;
   2. the opening or closing of any place of business of the llp;
   3. a change to the name;
   4. a change of the llp's registered office;
   5. a change in the profit shares;
   6. a change in the location where the llp's accounting records are kept;
   7. the admission of any member;
   8. authorising the service or revocation of any notice from the llp requiring a member to retire because they have been unable to perform their duties as a member for certain reasons as set out in the paragraph (leaving members) and sub-paragraph (retirement) below;
   9. the appointment of any member as a designated member or the revocation of any such appointment;
   10. the appointment of all members for the time being as designated members or any reversal of such a decision;
   11. the purchase of any capital item or connected items exceeding the expenditure limit;
   12. the borrowing or lending by the llp of a sum exceeding the expenditure limit;
   13. the giving of any guarantee or undertaking by the llp for a sum exceeding the expenditure limit;
   14. an increase in or the repayment of any member's capital share;
   15. the commencement of any legal proceedings by the llp;
   16. the voluntary winding-up of the llp;
   17. any amendment to this agreement; and
   18. placing the llp into administration or voluntary liquidation, appointing a liquidator, making a proposal for a voluntary arrangement, scheme of compromise or arrangement with its creditors, or applying to the court to wind up the llp.
4. any decision or action to be taken by the members can be taken without a meeting if all the members concerned unanimously consent to it in writing.

risk management

limitations on members' powers as agents

1. members can only do the following with all members' agreement:
   1. engage or dismiss any employee of the llp;
   2. pledge the credit of the llp or incur any liability or lend any money on behalf of the llp, but agreement is not required if this is (i) in the ordinary course of business (ii) for the benefit of the llp and (iii) the amount is less than or equal to the expenditure limit;
   3. pledge the credit of the llp or incur any liability or lend any money on behalf of the llp above the expenditure limit;
   4. give any guarantee or undertaking on behalf of the llp for any sum or connected sums above the expenditure limit;
   5. compromise or compound or (except on payment in full) release or discharge any debt or connected debts due to the llp if these are above the expenditure limit.
2. members must not:
   1. have any dealings with any person the members have previously resolved not to deal with;
   2. allow the llp to enter into any bond or become bail or surety for any person;
   3. knowingly cause or permit anything to be done where the property of the llp could be taken in execution or otherwise jeopardised;
   4. assign, mortgage or charge their interest in the llp; or
   5. make an application to the court under section 994 of the companies act 2006.

member indemnity

1. the llp will indemnify each member from and against all payments made and personal liabilities incurred by them in the performance of their duties as a member in the ordinary course of the business or in respect of anything necessarily done by them for the preservation of the business or the property of the llp.

insurance

1. the llp will obtain and maintain policies of insurance (for its benefit or its members' benefit) against risks and for amounts as the members agree for:
   1. any property of the llp;
   2. employers' liability;
   3. public liability;
   4. professional negligence;
   5. loss of profits resulting from the destruction of or damage to premises used to carry out the business;
   6. loss of profits resulting from the destruction of or damage to or theft of any plant equipment, chattels, cars and other vehicles, including in the case of any computers or ancillary equipment any virus or corruption or loss of any software or data; and/or
   7. private health insurance for the members and employees of the llp,

   and any other insurance policies the members consider appropriate.

2. the members agree to provide any information and undergo any medical examination(s) reasonably required to obtain any of these policies.

guarantees and indemnities

1. if a member gives a guarantee on behalf of the llp after obtaining the members' consent by members' resolution:
   1. if the guarantee is called on and the member makes a payment due under that guarantee, the member in question is entitled to be indemnified immediately by the other members, so that the amount or aggregate amounts payable under the guarantee will be borne by the members in the same proportions as the members share profits and losses of the llp; and
   2. on the death, dissolution, retirement, deemed retirement or expulsion of that member the other members must:
      1. use their best endeavours to make the person having the benefit of the guarantee release that member (or their estate) from the guarantee;
      2. provide a substitute guarantor if required by that person as a condition of release;
      3. jointly and severally indemnify the member in question (or their estate) against any liability under the guarantee arising after that member's exit date.
2. for the avoidance of doubt, nothing in the above paragraph requires any member to indemnify any other member against a claim or liability resulting from the negligent act or omission of that other member.

new members

1. if the members want to admit an additional member they will negotiate in good faith any amendments to this agreement and/or ensure the prospective member signs a deed of adherence under which they agree to be bound by this agreement.
2. the designated members must notify companies house of the appointment of the new member.

leaving members

retirement

1. a member can retire from the llp by giving not less than  months' written notice to the llp. their exit date will be the date that notice expires.
2. a member will be deemed to retire from the llp:
   1. immediately on their death and their exit date will be the date of their death;
   2. on expiry of at least three months' written notice from the llp requiring them to retire as a member because they have been unable to perform their duties as a member for either:
      1. a continuous period of 12 months or more; or
      2. an aggregate period of 12 months or more during the previous 24-month period.

      any period of holiday or leave described in the paragraph above (maternity, parental and family leave) is excluded from this calculation. a notice under this paragraph is of no effect if the member who has been served the notice satisfactorily resumes their duties as a member before the notice expires and the llp decides to withdraw the notice; or

   3. immediately if the llp serves them written notice requiring them to retire as a member after they have become a patient under the mental health act 1983 and their exit date will be the date of that notice.

expulsion

1. the other members may by written notice (signed by all of them) to the member concerned expel that person immediately from membership of the llp if that person:
   1. commits a serious breach of this agreement which is either incapable of remedy or is not remedied within  business days after it occurs;
   2. commits persistent breaches of this agreement;
   3. has a bankruptcy order made against them;
   4. fails to pay any money owed by them to the llp within 10 business days of a written request for payment from the llp or any designated member;
   5. is guilty of any conduct likely to have a serious negative effect upon the business; or
   6. no longer holds a professional qualification or certification required for the normal performance of their duties as a member.
2. if the members are not already aware, a member must inform the other members as soon as possible after the occurrence of an event mentioned in the above paragraph.
3. the expulsion notice must give sufficient details of the alleged breach or breaches.
4. the expelled member's exit date is the date of expiration of the expulsion notice.

provisions relating to leaving members

1. if a member retires, is deemed to retire or is expelled on a date other than an accounting reference date:
   1. he is not entitled to receive any share of the profits of the llp from their exit date;
   2. the llp is not obliged to prepare any accounts other than the accounts which would normally be prepared for the next accounting reference date; and
   3. the profits of the llp shown in those accounts will be apportioned on a time basis for the periods before and after the member's retirement, deemed retirement or expulsion in order to calculate the amount of their capital share.
2. on retirement, deemed retirement or expulsion of a member the llp will owe them the amount of their capital share as shown in the accounts of the llp as at either the accounting reference date following his exit date or the accounting reference date that is their exit date. for the avoidance of doubt, there will be no goodwill payable to them.

payments to leaving members

1. on the death of a member the llp must:
   1. on the first day of the next three months, pay an amount equal to their normal monthly drawings then applicable. these payments will be made to the deceased member's personal representatives, widow or another person as the llp decides in its absolute discretion (but the llp is not concerned whether or not the recipient(s) of these payments will prove to be entitled at law to the deceased member's estate); and
   2. pay the member's capital share (after allowing for the payments referred to in the above paragraph to the deceased member's personal representatives as soon as reasonably practical but in any case within one year of their death (together with interest at the interest rate on the amount payable).
2. on the retirement, deemed retirement (other than on a death) or expulsion of a member, the llp will pay to the retiring or expelled member the amount of that member's capital share (together with interest at the interest rate on any part of it outstanding). the payment will be made by four equal six-monthly instalments. the date of the first instalment will be either the accounting reference date following their exit date or the accounting reference date that is their exit date. instalments can be paid earlier by the llp at its discretion.

leaving members' obligations

1. each leaving member must pay into the llp's bank account immediately all sums due from them to the llp and any of these sums which are not paid will be recoverable from them by the llp as a debt.
2. each leaving member must return to the llp all accounting records, letters and other documents in their possession relating to the llp which are needed for the continuing conduct of the business. while the leaving member is owed money by the llp, they or their duly authorised agents are permitted to inspect by appointment the llp's accounting records, letters and other documents to the extent they relate to any period preceding the exit date.
3. each leaving member must promptly do all things and sign all documents reasonably requested by the llp (and at the llp's sole expense) to assign or transfer to it any property or assets which immediately prior to the exit date were owned by or vested in the leaving member as nominee for or in trust for the llp.

general

winding up

1. no member has agreed with the other members or the llp that they will contribute in any way to the llp's assets on the winding up of the llp.
2. any surplus assets of the llp at the conclusion of the llp's winding up (and after payment of all money due to the llp's creditors and all expenses of the winding up) will be distributed to the members in proportion to their respective profit shares at the time.
3. if a court makes any declaration requiring any member to make a contribution to the assets of the llp then the other member(s) will indemnify that member so that the overall amount payable is borne by the members in proportion to their respective profit shares at the time.

entire agreement

1. this agreement contains the whole agreement between the parties relating to its subject matter and supersedes all prior discussions, arrangements or agreements that might have taken place in relation to the agreement. nothing in this paragraph limits or excludes any liability for fraud or fraudulent misrepresentation.

assignment

1. no party may assign, transfer, sub-contract, or in any other manner make over to any third party the benefit and/or burden of this agreement without the prior written consent of the other party or parties, such consent not to be unreasonably withheld.

variation

1. no variation to this agreement will be valid or binding unless it is recorded in writing and signed by or on behalf of the parties.

notices

1. any notice (other than in legal proceedings) to be given to a member under this agreement must be in writing and delivered by handing such notice to the member in question personally, by sending it pre-paid first class post to or leaving it by hand delivery at the last known address of the member in question or, being addressed to such member, by sending it pre-paid first class post to or leaving it by hand delivery at the registered address of the llp or by sending it by email to an address notified by the member in question as being an address at which such member is prepared to accept service of notices.
2. notices which are:
   1. sent by post will be deemed to have been received, where posted from and to addresses in the united kingdom, on the second business day after the date of posting, and where posted from or to addresses outside the united kingdom, on the tenth business day after the date of posting;
   2. delivered by hand will be deemed to have been received at the time the notice is left at the proper address; and
   3. sent by email will be deemed to have been received on the next business day after sending.

miscellaneous

1. the contracts (rights of third parties) act 1999 shall not apply to this agreement and no third party will have any right to enforce or rely on any provision of this agreement.
2. unless otherwise agreed, no delay, act or omission by a party in exercising any right or remedy will be deemed a waiver of that, or any other, right or remedy.
3. provisions which by their intent or terms are meant to survive the termination of this agreement will do so.
4. if any court or competent authority finds that any provision of this agreement (or part of any provision) is invalid, illegal or unenforceable, that provision or part-provision will, to the extent required, be deemed to be deleted, and the validity and enforceability of the other provisions of this agreement will not be affected.

governing law and jurisdiction

1. this agreement will be governed by and interpreted according to the law of england and wales. all disputes arising under the agreement will be subject to the exclusive jurisdiction of the english and welsh courts.

schedule 1

details of initial members

this agreement has been executed as a deed on the date(s) below.