Different classes of Members of LLPs – Part One
Here at Ralli Partnership Law, we are creating a lot of LLP agreements and we are often asked about all the different types of Members that can exist within an LLP. I thought I would try to set out, as clearly as possible, the different classes of Member that can exist within an LLP.
Iâ€™ll start by defining Member. A Limited Liability Partnership, or LLP, is (unlike a traditional partnership) a separate legal entity, which is registered at Companies House. A limited company has directors and shareholders, but an LLP has Members. Traditional partnerships have Partners.
This is where the confusion can begin! Members of an LLP are often called Partners. This is because the public are used to senior professionals being Partners in partnerships and many, within and outside the professions, regard the LLP as just a different type of partnership, which â€“ in some ways â€“ it is. We also suspect that many Senior Partners do not want to be called Senior Members!
So, Members can be called Partners. But not all those called â€œPartnerâ€ are Members! Partner, within an LLP, is just a title and there can be â€œNon-Member Partnersâ€. These are senior professionals, who are not Members of the LLP but are given the status of Partner.
More to follow in the next updateâ€¦