10@12 Webinar:LLPs – Companies in Disguise
10th March 2023
In many respects, particularly in relation to disputes, LLPs are essentially very like companies; and the idea of a ‘limited liability partnership’ is a misnomer. There are however some narrow, but important, differences between LLPs and companies which are traps for the unwary.
Andrew Thompson KC & Philip Morrison will consider:
- the fundamental features of LLPs which are relevant to disputes, and the different dispute resolution processes which are commonly used
- the implications of these dispute resolution issues for the formation and structuring of LLPs and transactions involving LLPs.
The webinar will be of interest to both dispute resolution lawyers and corporate lawyers.
10 points that will be covered :
- An LLP is a corporate entity subject to a large volume of companies legislation.
- There is huge flexibility and variety in the management and ownership structures of LLPs.
- The contractual and fiduciary duties owed by members of LLPs and those managing LLPs are bespoke.
- LLP members may have direct personal claims against other members, those managing the LLP or the LLP itself under the relevant LLP agreement.
- LLP members may also have such direct personal claims for breach of fiduciary duty, where the relevant bespoke fiduciary duties exist.
- Where section 994 Companies Act 2006 has not been excluded by unanimous agreement between the members, a member of an LLP may bring a claim based on unfairly prejudicial conduct of its affairs.
- A member may also, in appropriate circumstances, be able to bring a derivative claim on behalf of the LLP, using the common law form of derivative action (not the statutory derivative action under the Companies Act 2006).
- For those and other reasons (including for example the inclusion of arbitration clauses), the contents of the LLP agreement are usually absolutely critical to any dispute.
- There are certain key issues which need to be addressed in drafting an LLP agreement which do not arise in drafting a shareholders agreement or set of company articles.
- Most of the practical issues that arise in handling a contentious corporate transaction are the same whether the corporation is a company or an LLP.
