Limited Liability Partnership Formation
Limited Liability Partnership Formation
These are essentially similar to a general partnership but with the following points of distinction:-
- a Limited Liability Partnership is required to be registered with the Office of Fair Trading. The registration covers the name of the Partnership, thereby eliminating the requirement for a partnership of this type to register a business name.
- a limited liability partnership has two classes of partners: General Partners and Limited Partners.
- a General Partner is subject to all the normal rights and obligations of a partner under a general partnership in terms of being involved in the management of the partnership and assuming his share of the liabilities of the partnership. There must be a minimum of one General Partner.
- a Limited Partner is not permitted to partake in the management of the partnership and has no authority or power to contractually bind the partnership (as would a General Partner).
- a Limited Partner is not required to contribute to the debts or obligations of the firm beyond the amount shown in the Register of Limited Partnerships in respect of each Limited Partner. That amount is advised by the Partnership upon registration.
- there must be a minimum of one Limited Partner. If there are no Limited Partners, the partnership may still survive, but as a General Partnership, rather than a Limited Liability Partnership. Notification of this loss of status must be advised to the Office of Fair Trading.
- if a Limited Partner makes a contribution towards the amount of any capital or the value of any property that the Limited Partner has agreed to contribute to the partnership, the liability of the Limited Partner is reduced to such part of the amount shown in the Register of Limited Partnerships as remains outstanding